Goldrich Mining Company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-06412

GOLDRICH MINING COMPANY

(Exact Name of Registrant as Specified in its Charter)

ALASKA		91-0742812
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2607 Southeast Blvd, Ste. B211
Spokane, Washington		99223-4942
(Address of Principal Executive Offices)		(Zip Code)

(509) 535-7367

(Registrant’s Telephone Number, including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. o 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). o 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.

Large accelerated filer o		Accelerated filer	o
Non-accelerated filer x	(Do not check if a smaller reporting company)	Smaller reporting company	x
		Emerging Growth Company	o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o Yes x No

Number of shares of issuer’s common stock outstanding at December 18, 2020: 167,926,376

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION4

Item 1. Financial Statements4

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation24

Item 3. Quantitative and Qualitative Disclosures about Market Risk38

Item 4. Controls and Procedures38

PART II – OTHER INFORMATION39

Item 1. Legal Proceedings39

Item 1A. Risk Factors39

Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds39

Item 3. Defaults upon Senior Securities39

Item 4. Mine Safety Disclosure39

Item 5. Other Information39

Item 6. Exhibits40

COVID-19

In March 2020, COVID-19 was declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings and certain business operations. These restrictions significantly disrupted economic activity in Goldrich’s business, as manifested in:

·the inability of Company management, geologic professionals and contractors to travel to the Company’s Alaska property to engage in any meaningful field work,

·restrictions placed on face-to-face meetings with staff, members of the Board of Directors and other direct stakeholders to smoothly conduct Company business, and

·a general slowdown in capital markets and investor activities in the Company’s industry as it conducted ongoing, and subdued capital-raising activities,

As of June 30, 2020, there was no disruption or impact to the Company’s financial statements. Since December 31, 2019, due to the arbitration proceedings (as described herein) and limited cash availability, the Company has been largely inactive at its Chandalar property. However, if the severity of the economic disruptions increase as the duration of the COVID-19 pandemic continues beyond the Company’s current inactive period, anticipated to end in the late winter/early spring of 2021, the negative financial impact due to limitation in conducting geologic field work and exploration activities could be significantly greater in future periods.

In addition, the economic disruptions caused by COVID-19 could also adversely impact the impairment risks for certain long-lived assets and equity method investments. Goldrich evaluated these impairment considerations and determined that no such impairments occurred as of June 30, 2020.

As of June 30, 2020, Goldrich’s available capital was approximately $21,800 and as of December 18, 2020 its available capital was approximately $1,000. Management believes the Company will need additional capital resources under new or existing credit facilities and operating agreements. To the extent that future access to the capital markets or the cost of funding is adversely affected by COVID-19, the Company may need to consider alternative sources of funding for operations and working capital, which may adversely impact future results of operations, financial condition, and cash flows.

In March 2020, President Trump signed into law legislation referred to as the "Coronavirus Aid, Relief, and Economic Security Act" (the CARES Act). The CARES Act includes tax relief provisions such as: (a) an Alternative Minimum Tax (AMT) Credit Refund, (b) a 5-year net operating losses (NOL) carryback from years 2018-2020 and (c) delayed payment of employer payroll taxes. As of December 31, 2019, Goldrich had approximately $42.8 million in NOL’s, which cannot be carried back to prior years to generate tax refunds, since no tax has been paid in those years by the Company.

The Company is taking steps to mitigate the potential risks to suppliers and employees posed by the spread of COVID-19. The Company has implemented work from home policies where appropriate. The Company will continue to monitor developments affecting both their workforce and contractors, and will take additional precautions that management determines are necessary in order to mitigate the impacts. There has been no material adverse impact to the Company’s business operations due to remote work. Despite efforts to manage these impacts to the Company, the ultimate impact of COVID-19 also depends on factors beyond management’s knowledge or control, including the duration and severity of this outbreak as well as third-party actions taken to contain its spread and mitigate its public health effects. Therefore, management cannot estimate the potential future impact to financial position, results of operations and cash flows, but the impacts could be material.

Goldrich Mining Company Consolidated Statements of Cash Flows (Unaudited)
	Six Months Ended
	June 30,
	2020	2019
Cash flows from operating activities:
Net loss	$ (943,934)	$ (792,418)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization	474	654
Change in fair value of notes payable in gold	65,390	33,748
Warrants issued for finance costs	-	26,354
Discount on note payable	15,684	29,809
Accretion of asset retirement obligation	3,119	6,956

Change in:
Prepaid expenses	(44,048)	(23,509)
Accounts payable and accrued liabilities	124,476	100,559
Interest payable	116,186	28,559
Interest payable – related party	253,764	185,719
Related party payable	80,888	78,608
Net cash used - operating activities	(328,001)	(324,961)
Cash flows from financing activities:
Proceeds from CARES Act PPP loan	50,600	-
Proceeds on notes payable and warrants, net	40,000	64,000
Proceeds from notes payable and warrants – related party, net	258,000	206,000
Net cash provided - financing activities	348,600	270,000

Net (decrease) in cash and cash equivalents	20,599	(54,961)

Cash and cash equivalents, beginning of period	1,274	77,178
Cash and cash equivalents, end of period	$ 21,873	$ 22,217

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

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

1.BASIS OF PRESENTATION

The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete 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 financial statements have been included. Operating results for the three and six-month periods ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020.

For further information refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Going Concern

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company has incurred losses since its inception and does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds.

The Company currently has no historical recurring source of revenue and an accumulated deficit of $36,437,709 at June 30, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company may profitably execute a production business plan, and thereby, its ability to continue as a going concern may improve and become less dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include the profitable exploitation of its mining properties and financing the Company’s future operations through sales of its common stock and/or debt.

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

Certain prior period amounts have been reclassified to conform to the 2020 financial statement presentation. Reclassifications had no effect on net loss, stockholders' equity, or cash flows as previously reported.

Earnings (Loss) Per Share

We are authorized to issue 250,000,000 shares of common stock, $0.10 par value per share. At June 30, 2020, there were 139,573,798 shares of our common stock issued and outstanding. Subsequent to June 30, 2020, at the special shareholders meeting on November 13, 2020, the Company’s shareholders authorized the Company to issue up to 750,000,000 shares of common stock, $0.10 par value per share.

For the periods ended June 30, 2020 and 2019, the effect of the Company’s outstanding preferred shares, options and warrants, totaling 85,140,499 and 97,261,792, respectively, would have been anti-dilutive. The total of dilutive instruments decreased during the six-month period ended June 30, 2020 due to the expiration of the Class O, Class P, and Class P-2 warrants.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Accounting for Investments in Joint Ventures

ASC 321 Investments – Equity Securities provides guidance for equity interests that meet the definition of an equity security, as well as other equity interests (such as investments in partnerships, unincorporated joint ventures, and limited liability companies) that are required to be accounted for like equity securities under ASC 321. The term “equity interest” refers to all equity instruments within the scope of ASC 321. Under ASC 321, all equity investments are to be accounted for at fair value. However, there is a measurement alternative for those investments without readably determinable fair values. As required by ASC 321-10-35-2, the appropriate method for investments without a readily determinable fair value is “cost less impairment”.

The Company has an equity interest in Goldrich NyacAU Placer LLC, a 50%-owned joint venture in which the Company does not have joint control or significant influence. See Note 3 Joint Venture. Additionally, the ownership interests of the joint venture are not traded on any established market, and the fair value of the joint venture cannot be readably determined or estimated. Therefore, the Company measures its investment in the joint venture at cost less impairment, adjusted for any distributions received during the period. The carrying amount of this investment was $nil as of June 30, 2020 and 2019, respectively.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The update removes, modifies and makes additions to the disclosure requirements on fair value measurements. The update is effective for fiscal years beginning after December 15, 2019. The Company adopted this change during the three-month period ended March 31, 2020. This adoption did not have a material effect on the Company’s financial statements.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Cash and Cash Equivalents

For the purposes of the statement of cash flows, we consider all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating the recoverability of the cost of mining claims, joint venture distributions, accrued remediation costs, asset retirement obligations, stock-based compensation, deferred tax assets and related valuation allowances, and uncertainties regarding the outcome of arbitration proceedings. Actual results could differ from those estimates.

Property, Equipment, and Accumulated Depreciation

Property and equipment are stated at cost, which is determined by cash paid or fair value of the shares of the Company’s common stock issued. The Company’s property and equipment are located on the Company’s unpatented state mining claims located in the Chandalar mining district of Alaska.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

All property and equipment purchased prior to 2009 are fully depreciated. The Company’s equipment is located at the Chandalar property in Alaska, with a small amount of office equipment located at Company offices in Spokane, Washington. Assets are depreciated on a straight-line basis. Improvements, which significantly increase an asset’s value or significantly extend its useful life are capitalized and depreciated over the asset’s remaining useful life.

When a fixed asset is sold at a price either higher or lower than its carrying amount, or undepreciated cost at the date of disposal, the difference between the sale proceeds over the carrying amount is recognized as gain, while a loss is recognized when the carrying amount exceeds the sale proceeds. The gain or loss is recognized in the Consolidated Statements of Operations.

Mining Properties, Claims, and Royalty Option

The Company capitalizes costs for acquiring mineral properties, claims and royalty option and expenses, costs to maintain mineral rights and leases as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.

Income Taxes

Income taxes are recognized in accordance with Accounting Standards Codification (“ASC”) 740 Income Taxes, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.

Uncertain tax positions are evaluated in a two-step process, whereby (i) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the related tax authority would be recognized.

During the year ended December 31, 2016, the Company filed amended tax returns to correct allocations of Joint Venture losses reported to the Company for the years ending 2012 through 2015, resulting in an increase in losses reported on its federal and state tax returns of $7.5 million and $6.8 million, respectively. For each year since 2015, the Company filed its federal and state tax returns with corrected allocations of losses from the Joint Venture. The Company’s and the Joint Venture’s federal returns for the 2015, 2016 and 2017 tax years are under audit by the Internal Revenue Service (“IRS”) to determine correct allocation of losses for the Joint Venture and its partners. In August 2020, the IRS issued an unfavorable ruling as it affects the Company in regard to the audit of the joint venture which, when the individual partners’ effects are communicated to the Company by the IRS, is probable to decrease the Company’s net federal and state net operating loss carryforwards (“NOL”) by totals of $2.0 million and $1.8 million, respectively for the years under audit. The change would not result in any current tax liability or refund unless and until the Company could utilize its net operating loss carryforwards. The 2018 tax return would require amendment with a reduction to taxable net operating loss of approximately $41,000.

The Company has assessed its tax positions other than the NOL issue above and has determined that it has taken an uncertain tax position that is probable to affect its federal and state net operating loss carryforwards in amounts by $2.0 million and $1.8 million, respectively, as described above, but does not give rise to an unrecognized tax liability being reported. In the event that the Company is assessed penalties and/or interest, penalties will be charged to other operating expense and interest will be charged to interest expense.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Revenue Recognition

The Company does not have joint control or significant influence over the joint venture; therefore, distributions from our joint venture are recognized using the cost less impairment method. In accordance with ASU No. 2014-09, the Company has determined that our revenue does not arise from contracts with customers, does not involve satisfaction of any performance obligations on the part of the Company, or require company assets to be recognized or applied to determine costs to obtain or fulfill any contract generating revenue. Other than any distribution the Company is awarded in arbitration (see Note 3 Joint Venture), there will be no further distributions due to arbitration proceedings and dissolution of the joint venture. (See note 3, Joint Venture)

Stock-Based Compensation

The Company periodically issues common shares or options to purchase shares of the Company’s common shares to its officers, directors or other parties. These issuances are recorded at fair value. The Company uses a Black Scholes valuation model for determining fair value of options to purchase shares, and compensation expense is recognized ratably over the vesting periods on a straight line basis. Compensation expense for grants that vest immediately are recognized in the period of grant.

Exploration Costs

Exploration costs are expensed in the period in which they occur.

Remediation and Asset Retirement Obligation

The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. A corresponding asset is also recorded and depreciated over the life of the long-lived asset using a units of production method. After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts recognized is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.

For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed.

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 are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

During 2020 and 2019, the Company determined fair value on a recurring basis and non-recurring basis as follows:

Balance

June 30, 2020

Balance

December 31, 2019

Fair Value

Hierarchy level

Liabilities

Recurring: Notes payable in gold (Note 6)

$ 471,709

$ 406,319

The carrying amounts of financial instruments, including notes payable, and notes payable – related party approximate fair value at June 30, 2020 and December 31, 2019. The inputs to the valuation of Level 2 liabilities are described in Note 6 Notes Payable in Gold.

3.JOINT VENTURE

On April 3, 2012, Goldrich Placer, LLC (“GP”), a subsidiary of Goldrich, entered into a term sheet for a joint venture with NyacAU, LLC (“NyacAU”), an Alaskan private company, to bring Goldrich’s Chandalar placer gold properties into production as defined in the joint venture agreement (the “Operating Agreement”), which was subsequently signed and made effective April 2, 2012. In each case as used herein in reference to the JV, ‘production’ is as defined by the Operating Agreement. As part of the Operating Agreement, GP and NyacAU (together the “Members”) formed a 50:50 joint venture company, Goldrich NyacAU Placer LLC (“GNP”), to operate the Chandalar placer mines, with NyacAU acting as managing partner. Goldrich has no significant control or influence over the JV, and therefore accounts for its investment using the cost less impairment method.

Under the terms of the Operating Agreement, NyacAU provided funding to the JV. The loans are to be repaid from future production. According to the Operating Agreement, on at least an annual basis, the JV shall allocate and distribute all revenue (whether in cash or as gold) generated from the JV’s placer operation in the following order:

1.Operating Expenses. GNP will first pay all Operating Expenses as defined in the Operating Agreement for placer mining operations at the Claims for the current mining year. Until Commercial Production is achieved, GNP will drawdown or use a line of credit from NyacAU (“LOC1”) to fund payment of the Operating Expenses and repay LOC1 to the extent of the current year's Operating Expenses.

2.Members' Distribution - Ten Percent (10%) Portion. After payment of Operating Expenses, GNP will distribute in kind twenty percent (20%) of the remaining gold produced, equally, ten percent (10%) to NyacAU as a Member of the GNP and ten percent (10%) to Goldrich as a Member of GNP; provided, however, that, for so long as any secondary line of credit from NyacAU to GNP (“LOC2”) or loan from NyacAU to GNP to purchase the Jumbo Basin royalty (“Loan3”) are not paid in full, GNP shall retain one hundred percent (100%) of this distribution to Goldrich and shall apply such funds as payment to reduce the balance of LOC2 and Loan3 until they are paid in full.

3.LOC1 Payments. After payment of Operating Expenses and the Members' distribution, GNP will apply any remaining revenue to reduce the remaining balance of LOC1, if any, until it is paid in full.

4.Reserves. After payment of Operating Expenses, the Members' distribution, and payment of LOC1, the Company may fund Reserves in an amount that is consistent with the annual budget.

5.Member Distributions, LOC2 Payments and Loan3 Recovery. After payment of Operating Expenses, the Members', payment of LOC1, and funding of any Reserves, from any remaining gold production or revenue, the Company will distribute fifty percent (50%) to NyacAU as a Member of GNP and fifty percent (50%) to Goldrich as a Member of GNP; provided, however, that, for so long as LOC2 or

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Loan3 are not paid in full, GNP shall retain one hundred percent (100%) of the distribution to Goldrich and shall apply such funds as payment to reduce the balance of LOC2 and Loan3 until they are paid in full. LOC2 has never been funded or utilized.

As of December 31, 2018, the JV had not achieved commercial production as required under the Operating Agreement. GNP was dissolved during 2019 and, as of June 30, 2020, the liquidation of GNP was in process.

On June 23, 2015, the Company raised net proceeds of $1.1 million through the sale of 12.5% of the cash flows of GP, Goldrich’s subsidiary, receives in the future from its interest in GNP (“Distribution Interest”), paid in cash under items #2, to Chandalar Gold, LLC (“CGL”) and GVC Capital, LLC,(“GVC”), both of which are non-related entities. Goldrich retained its ownership of its 50% interest in GNP but, after the transaction, subject to the terms of the GNP Operating Agreement, GP will effectively receive approximately 44%, CGL will effectively receive 6% (12% of Goldrich’s 50% of GNP = 6%) and GVC will effectively receive 0.25% (0.5% of Goldrich’s 50% of GNP = 0.25%) of any distributions produced by GNP. At June 30, 2020 and December 31, 2019, an amount of $35,794 has been accrued for the distribution which is included in accrued liabilities for distributions to the Company that were applied to Loan3. No amount has been accrued for the 2018 distribution due to uncertainties relating to realization of distributions from NyacAU, although during arbitration proceedings, Loan3 was determined and agreed to be paid in full (see Arbitration). Subsequent to June 30, 2020, Goldrich purchased approximately 49% of CGL.

In 2012, the joint venture purchased, on Goldrich’s behalf, a 2% royalty interest, payable on all production from certain Goldrich mining claims at the Chandalar, Alaska property for $250,000 from Jumbo Basin Corporation. This transaction gave rise to Loan3, which was carried at an interest rate of the greater of prime plus 2% or 10% and is to be repaid from distributions to Goldrich as defined in the Operating Agreement, prior to any distributions in cash to Goldrich. During the year ended December 31, 2019, the arbitration panel (see Arbitration below) awarded distributions from 2016 and 2017 to Goldrich from GNP. In accordance with the terms of the Operating Agreement, the Company applied the distributions toward Loan3 and the balance of principal and interest for LOC3 were paid in full at December 31, 2019.

Arbitration

In December 2017, the Company filed an arbitration statement of claim against NyacAU and other parties. The claim challenged certain accounting treatment of capital leases, allocations of tax losses, charges to the JV for funding costs related to the JV manager’s financing, related-party transactions, and other items of dispute in a previous mediation that was unsuccessful in reaching an agreement. As a result, the Company participated in an arbitration before a panel of three independent arbitrators during 2018 to address these items. Through 2019 and the date of filing of this report in 2020, the Company has continued to respond to panel inquiries, make motions to prosecute or defend positions, answer motions made by the opposing JV partner and aggressively support the Company’s efforts toward success.

The Company records amounts for loss when it is probable that a liability is realizable and can be reasonably estimated. To date, the arbitration proceedings are still in progress, with some rulings being issued for and against the Company’s positions. No assurance can be given that the arbitration will result in a successful outcome for the Company. Due to uncertainties relating to the pending outcome, the financial statements contain only adjustments for the final results of the arbitration that are estimable and probable. See Note 8 Commitments and Contingencies and Note 9 Subsequent Events for additional information and rulings subsequent to June 30, 2020. The Company incurred $60,161 and $65,999 in arbitration expenses during the three- and six-month periods ended June 30, 2020, respectively, compared to $27,420 and $(19,303) for the three- and six-month periods ended June 30, 2019, respectively. The $(19,303) is a result of a $240,147 reimbursement for costs by the Company’s Directors and Officers insurance, netted against expenses of $220,844 for the six months ended June 30, 2019.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

4.RELATED PARTY TRANSACTIONS

Beginning in January 2016 and through June 30, 2020, the salary of the Company’s Chief Executive Officer (“CEO”) has not been paid in full. Fees due to the Company’s Chief Financial Officer (“CFO”) have been accrued and remain unpaid:

CEO	Six Months ended 6/30/20	Year ended 12/31/19
Beginning Balance	$426,500	$295,000
Deferred During Period	79,820	180,000
Cash Paid During Period	(2,500)	(48,500)
Ending Balance	$503,820	$426,500

CFO
Beginning Balance	$78,644	$64,909
Deferred During Period	3,068	42,703
Cash Paid During Period	(2,500)	(28,968)
Ending Balance	$79,212	$78,644

Board fees payable	98,003	95,003
Total Related party payables	$ 681,035	$ 600,147

See Note 5 for additional related party transactions.

5.NOTES PAYABLE & NOTES PAYABLE – RELATED PARTY

At June 30, 2020, the Company had outstanding Notes payable of $1,062,105 and outstanding Notes payable – related party of $3,517,895, net of all discounts. At December 31, 2019, the Company had outstanding Notes payable of $1,020,000 and outstanding Notes payable - related party of $3,246,316, net of all discounts. The Notes payable and Notes payable – related party had matured on October 31, 2018. In November 2019, the Company and the holders of the notes amended the notes, and the notes are now due within 10 days of a demand notice of the holders. There has been no notice of default or demand issued by any holder.

During the six months ended June 30, 2020, the Company received additional tranches of the notes payable for $313,684 discounted at 5%, or $15,684, resulting in net proceeds of $298,000 of which $258,000 was from a related party, Nicholas Gallagher, a shareholder and director of the Company, who also holds the full balance of the Notes payable – related party described above. During the six months ended June 30, 2019, the Company received a tranche of notes payable for $194,737, discounted at 5%, or $9,737, resulting in net proceeds of $270,000 for the six months ended June 30, 2019, of which $206,000 was from Nicholas Gallagher, a related party. The notes are due upon demand; therefore, the discounts and related warrants issued with them were immediately expensed to finance costs.

During the three and six months ended June 30, 2020, the Company accrued cash finders fees related to this debt financing totaling $3,990 and $8,940, respectively, compared to $40,350 and $45,900 for the three- and six-month periods ended June 20, 2019, and are included in interest expense and finance costs. Interest and financing costs, including finders fees, of $168,066 and $329,632 was expensed during the three and six months ended June 30, 2020, which is included in interest expense and finance costs on the consolidated statements of operations, compared to $132,135 and $259,183 expensed during the three and six months

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

ended June 30, 2019, respectively. Total interest of $1,066,027 is accrued at June 30, 2020 and is included in Interest payable, Interest payable – related party, Interest payable in stock, and Interest payable in stock – related party. Interest due at June 30, 2020 was not timely paid.

A total of 22,608,357 five-year Class T warrants have been issued in connection with the note issuances, of which 20,933,664 have been issued to holders and 1,674,694 have been issued for finders fees. The warrants have an exercise price of $0.03 and expire on various dates from November 30, 2022 through December 19, 2024. During the three and six months ended June 30, 2020, the Company issued no warrants in connection with the notes payable. During the three and six months ended June 30, 2019, the Company issued 1,104,155 and 1,611,470 warrants in connection with the notes payable, respectively.

The table below summarizes the total senior secured notes due, the amount received with discount, warrants issued for finders fees and cash expensed for finders fees for all periods related to the senior secured notes payable and senior secured notes payable – related party.

	Tranche Date	Net amount after 5% Discount		Note Prior to Discount			Warrants issued to lenders	Finders fees in Warrants	Finders fees in Cash
Notes Payable	Dec. 22, 2017	$ 705,000		$ 742,105			3,896,047	311,684	$ -
Notes Payable	Dec. 24, 2018	$ 200,000		$ 210,526			1,105,262	88,421	$ 6,000
Notes Payable	Mar. 31, 2019	$ 14,000		$ 14,737			77,368	6,189	$ 420
Notes Payable	June 30, 2019	$ 50,000		$ 52,632			276,315	22,105	$ 1,500
Notes Payable	Mar. 31, 2020	$ 40,000		$ 42,105			-	-	$ 1,200
		$ 1,009,000		$ 1,062,105	5,354,992			428,399	$ 9,120

Related Party	Dec. 22, 2017	$ 1,000,000		$ 1,052,632			5,526,312	442,105	$ 30,000
Related Party	Dec. 24, 2018	$ 1,260,000		$ 1,326,316			6,963,155	557,052	$ 37,800
Related Party	Mar. 31, 2019	$ 71,000		$ 74,737			392,368	31,390	$ 2,130
Related Party	June 30, 2019	$ 135,000		$ 142,105			746,051	59,684	$ 4,050
Related Party	Sept. 30, 2019	$ 303,000		$ 318,947			1,674,471	133,958	$ 9,090
Related Party	Oct. 31, 2019	$ 50,000		$ 52,632			276,315	22,105	$ 1,500
Related Party	Dec. 18, 2019	$ 265,000		$ 278,947			-	-	$ 7,950
Related Party	Mar. 31, 2020	$ 125,000		$ 131,579			-	-	$ 3,750
Related Party	Jun. 30, 2020	$ 133,000		$ 140,000			-	-	$ 3,990
		$ 3,342,000		$ 3,517,895	15,578,672			1,246,295	$ 100,260
			$ 4,351,000	$ 4,580,000		20,933,664		1,674,693	$ 109,380

The total fair value of the Class T warrants was estimated on the issue dates at $nil and $25,863 for the six months ended June 30, 2020 and June 30, 2019, respectively, using the following weighted average assumptions:

	June 30, 2019
Market price of common stock on date of issuance	$0.007 - $0.0275
Risk-free interest rate	1.8% - 2.51%
Expected dividend yield	0
Expected term (in years)	5
Expected volatility	154.7% - 162.5%

Effective November 1, 2019, the Company entered into an Amended and Restated Loan, Security, and Intercreditor Agreement (the “Amended Agreement”) with Nicholas Gallagher, a related party and member of the Company’s Board of Directors, in his capacity as agent for and on behalf of the holders of the Notes payable. No compensation was paid or accrued for Mr. Gallagher, either in cash or warrants, for his services as agent for other holders. Pursuant to the Amended Agreement, in exchange for the secured promissory notes and other consideration:

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

1.Holders have loaned to borrower prior to November 1, 2019, an aggregate principal amount of $3,987,368;

2.Gallagher has agreed to make additional loans to borrower from and after November 1, 2019, totaling a maximum principal amount of $394,737 (the net proceeds of which to the Company will be $375,000);

3.With his consent, any new lender or existing holder may make an additional loan or loans under the Amended Agreement;

4.Any loans arising after July 1, 2018 by Mr. Gallagher and any loans made after November 1, 2019 by any new or existing Holder other than Gallagher, after Gallagher has consented in writing to such loan or advance, are Senior secured loans. Senior Notes are entitled to be repaid in full before any of the Junior Notes are repaid; and

5.The Company agreed to other terms, the most significant of which are as follows:

a.to pay, no later than February 28, 2021, (1) to the order of NGB Capital Limited (a company owned by Mr. Gallagher), a finder’s fee in the amount of $49,273, and (2) to the order of Capital Investments 4165 LLC a finder’s fee in the amount of $7,920. Of these amounts $6,500 and $nil have been remitted as of the date of this report; and

b.to reimburse Gallagher, no later than February 20, 2020, for up to $35,000 in legal fees and costs incurred by Gallagher in connection with the Amended Agreement. The Company accrued $32,644 at December 31, 2019 and this amount was paid during the three months ended March 31, 2020.

Under the Amended Agreement, for each holder of the Notes payable, whether or not a related party:

1.The borrower and holder entered into a Deed of Trust whereunder the Notes are secured by a security interest in all real property, claims, contracts, agreements, leases, permits and the like.

2.The borrower and any holder may negotiate a separate agreement enabling the borrower to issue shares to the holder in satisfaction of some or all interest that may be due to that Holder.

3.The Company entered into a Guaranty whereunder, among other conditions, the Company unconditionally guarantees and promises to pay to the order of each holder:

a.the principal sum of each Note payable held by such holder when and as the same becomes due, whether at the stated maturity thereof, by acceleration, call for redemption, tender, or otherwise,

b.all interest payable on each such Note payable when and as the same becomes due, and

c.any other amounts owing by the Company to such holder under the Amended Agreement or any other loan document when and as the same becomes due.

In an agreement separate from the Amended Agreement, Goldrich and Mr. Gallagher agreed that Mr. Gallagher, at his option, has the right to convert outstanding but unpaid and future interest on his loan into stock of the Company at $0.015 per share. In another agreement separate from the Amended Agreement, Goldrich and holders, other than Mr. Gallagher, agreed to convert $36,813 of unpaid interest into stock of the Company at $0.015 per share. During 2020, a total of 13,719,248 common shares with a basis of $0.015 per share, were issued to the holders, reducing interest payable by $205,789 (see Note 8 Subsequent Events).

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Several events of default were enumerated in the Amended Agreement, including the following:

a.the Company fails to pay (i) any portion of the principal amount of any Note when due or (ii) any accrued and unpaid Interest when due and such failure continues for three (3) Business Days or (iii) any other amount that is due and payable under this Amended Agreement, any Note, or the Deed of Trust and such failure continues for ten (10) Business Days after demand for such payment is made by the Holder;

b.the Company fails to observe or perform any other obligation, covenant, or agreement applicable to the Company under this Amended Agreement as and when due and fails to cure such failure within 10 Business Days of notice of such failure by the holder to the Company;

c.the Company fails to observe or perform any covenant or agreement applicable under the Guaranty and fails to cure such failure within 10 Business Days of notice of such failure by the holder to the Company;

d.an insolvency or liquidation proceeding or assignment is commenced with respect to the Company or its subsidiary; or

e.any alleged creditor other than the holders seeks to collect any amount allegedly due and owing to said creditor at that time.

6.NOTES PAYABLE IN GOLD

During 2013, the Company issued notes payable in gold totaling $820,000, less a discount of $205,000, for net proceeds of $615,000. Under the terms of the notes, the Company agreed to deliver gold to the holders at the lesser of $1,350 per ounce of fine gold or a 25% discount to market price as calculated on the contract date and specify delivery of gold in November 2014.

During the year ended December 31, 2019, the Company renegotiated terms with the holders. A default condition arising from the non-delivery of the gold on March 31, 2019, was alleviated by agreements with the three note holders with the following amended terms:

·The fourth delayed delivery required quantity shall be delivered to the purchaser at the delivery point on the date that is sixty (60) days after the date that the purchaser gives notice to the Company that the required quantity must be delivered.

·Subsequent to February 28, 2019, the Company agreed to pay interest on the value of the fourth delayed delivery required quantity at an annual percentage rate of 10% from February 28, 2019, payable quarterly with any remaining interest due and payable on the delivery date for the required quantity. Interest shall be non-compounding, provided however, that any interest not paid in full by any required interest payment date, shall be added to the principal and shall be subject to interest at the interest rate until such late interest payment is made in full.

·The Company, at the Company’s sole discretion, has the option to pay or deliver the required quantity prior to receiving notice from the purchaser demanding payment of the required quantity or prior to sixty days after the notice date. If the Company exercises this option, in relation to the required quantity, the delivery date as set forth in the original agreement, was amended to be the date of actual payment or delivery.

·The value of the required quantity was reset on March 1, 2019 and was equal to the number of ounces of gold in the fourth delayed delivery required quantity multiplied by the original purchase price used to calculate the amount of gold due in the original agreement.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Through the date of the issuance of these financial statements, the gold notes have not been paid and the note holders have not demanded payment or delivery of gold. At June 30, 2020 and 2019, 266.788 ounces of fine gold was due and deliverable to the holders of the Notes.

Due to the change in the delivery terms provided in the sixth amendment, the Company estimated the fair value of the notes based upon the market price of gold on June 30, 2020 of $1,768 per ounce as quoted on the London PM Fix market or $471,709 as of June 30, 2020. The valuation resulted in an increase in gold notes payable of $65,390 during the six months ended June 30, 2020.

At June 30, 2019, the fair value was calculated using the market approach with Level 2 inputs of gold delivery contracts based upon previous contractual delivery dates. At December 31, 2019, the Company had outstanding total notes payable in gold of $406,319.

Interest of $18,448 was expensed during the six months ended June 30, 2020, and $31,928 is accrued at June 30, 2020 and is included in Interest payable.

7.CARES Act PPP Loan

On April 15, 2020, the Company was granted a loan (the “Loan”) from Washington Trust Bank, in the aggregate amount of $50,600, 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 15, 2020 issued by the Borrower, matures on April 15, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 15, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

On October 22, 2020, the Loan had a change in terms. Under the new terms, the maturity date was changed to May 1, 2022 and the first payment was deferred to June 1, 2021 to allow additional time to prepare the forgiveness application. If the application is denied, the first payment will be due the first of the month following the remittance. Additionally, if the forgiveness application is denied, the Company will have the option to extend the loan to May 1, 2025 instead of the current maturity date of May 1, 2022. As of the date of this report, the Company has not submitted its forgiveness application.

8.COMMITMENTS AND CONTINGENCIES

We are subject to Alaska state annual claims rental fees in order to maintain our non-patented claims. In addition to the annual claims rental fees of approximately $125,945 due November 30 of each year, we are also required to meet annual labor requirements of approximately $61,100 due November 30 of each year. The Company is able to carry forward costs for annual labor that exceed the required yearly totals for four years. The Company has significant carryovers to 2020 to satisfy its annual labor requirements. This carryover expires in the years 2020 through 2024 if unneeded to satisfy requirements in those years. Subsequent to June 30, 2020, the Alaska Department of Natural Resources approved an extension to delay the payment of the approximately $125,945 of state annual claims rental fees due November 30, 2020 to September 1, 2021.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Arbitration

In 2017, the Company, its subsidiary and the joint venture, as claimants, filed an arbitration statement of claim before a three-member Arbitration Panel (“the Panel”), against our JV partner and its affiliates; NyacAU, LLC (“NyacAU”), BEAR Leasing, LLC, and Dr. J. Michael James, as respondents. In 2018, the respondents filed a counter-claim against the Company, its subsidiaries and certain members of the Company’s current and former management, the counterclaim respondents. The arbitration claim alleged, amongst other things, claims concerning related-party transactions, accounting issues including capital vs. operating leases, interpretation of the joint venture operating agreement, allocation of tax losses between the joint venture partners, and unpaid amounts due Goldrich relating to the Chandalar Mine.

It is possible that there could be either adverse or favorable developments in the arbitration pending with the Company and its JV partner. The Company records provisions in the consolidated financial statements for pending arbitration results when it determines that an outcome is probable, and the amount of loss can be reasonably estimated. At the present time, except as stated otherwise, while it is reasonably possible that a favorable or unfavorable outcome in the arbitration may occur, after assessing the information available, management is unable to estimate the possible loss, or range of losses, for the pending arbitration; and accordingly, no estimated losses have been accrued in the consolidated financial statements for favorable or unfavorable outcomes. Legal defense costs are expensed as incurred. Favorable rulings would not result in the recognition of gains prior to offsetting against losses, due to the ruling being an estimate which must be constructively received prior to recognition.

During the year ended December 31, 2019, the Panel released various awards relating to the allegations of both parties. Some of which have been in favor of the Company’s positions some have been in favor of our JV partner and its affiliates. The arbitration is ongoing and the various parties to the claims and counterclaims continue to disagree on several matters.

On May 25, 2019, the Panel issued an Interim Award, which requested input from the parties on a small number of discrete issues, all input to be supported by references to the arbitration record.

On November 30, 2019, the Panel ordered the Partial Final Award and concurrently the Second Interim Award RE Dissolution/Liquidation of GNP and Related Issues (“the Second Interim Award”).

The Partial Final Award

The Partial Final Award addressed several matters including leases and the impact of their characterization on interim distributions. As a result, the Panel determined that the Company is entitled to an additional $214,797 in distributions for 2016 and an additional $198,644 for 2017, for a total of $413,442 from GNP. In like manner, the Panel determined that NyacAU is entitled to an additional $413,442 in distributions for these years. As the Company is uncertain as to the collectability of these distributions, no recognition of these revenues is included in its Statement of Operations for the three and six months ended June 30, 2020.

The Partial Final Award also addressed the Company’s claim for payment of interest earned by LOC 1. The Panel determined that NyacAU should pay the Company 50% of the interest earned on LOC 1 actually received by NyacAU, or $126,666. The Company has not accrued a receivable or recognized interest income for the interest due to uncertainties surrounding its collectability. Subsequent to March 31, 2020, the panel issued additional rulings stating the amount owed to be $120,883 to Goldrich plus 5% prejudgment interest on unpaid LOC1 interest as it fell due.

The Panel ruled Goldrich was responsible to pay NyacAU for the 2012 reclamation work and NyacAU is also entitled to 5% interest on the award from the date the first invoice was sent to Goldrich in 2014. Goldrich has accrued a liability for this ruling on its consolidated balance sheet of $429,573 included in

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

accounts payable and interest payable; however, Goldrich has contested the party to whom payment should be made and whether additional amounts not invoiced by GNP should be included in the award.

The Partial Final Award found the Company liable for an act of negligent misrepresentation regarding the concealment of certain technical information from NyacAU. The Company has vigorously disputed the concealment and the finding of negligence. Nevertheless, as a result of the Panel’s determination, the Panel awarded Dr. J. Michael James a reimbursement of 17% of his previous $350,000 stock investment in the Company or $59,500 plus prejudgment interest of 5% and legal fees. In addition, the Panel awarded Dr. James $9,858, plus prejudgment interest at 5% and legal fees, for personal expenses incurred relating to GNP’s operations. These amounts plus additional interest have been included in accounts payable and interest payable on the consolidated balance sheet, respectively, at June 30, 2020.

The Second Interim Award

The Second Interim Award was necessitated by the fact that the dissolution/liquidation of the joint venture had not yet run its course. In the Second Interim Award the Panel ordered that:

a)No later than January 15, 2020, NyacAU and Goldrich shall attempt to establish, by agreement, a market value for the GNP permit in connection with a transfer of the Permit to Goldrich or a third party, taking into consideration the obligation of GNP, or any transferee of the permit, to complete reclamation in accordance with NyacAU’s government-approved reclamation plan.

b)Reasonably prior to May 31, 2020, NyacAU shall perform its obligation to “make provision … for reclamation by (1) adding all reclamation expenses actually incurred by NyacAU to LOC 1; (2) from GNP’s assets, to the extent possible after payment of GNP’s debts and liabilities and liquidation expenses”.

Neither order from the Second Interim Award was successfully executed by the parties on the dates specified by the Panel. The Second Interim Award confirmed the dissolution of GNP and noted that “no provision of the Claims Lease or the Operating Agreement speaks directly to the rights or obligations of GNP to transfer its mining permit, which is held in the name of the manager, NyacAU. Although GNP no longer has the right to mine, GNP and specifically NyacAU have the liability of reclamation.

Balance and payment of LOC1

The Panel calculated a tentative balance of LOC1 at $16,483,271 as of June 2019. This balance will be adjusted for any additional costs incurred by GNP in the liquidation or awards and/or adjustments made by the arbitration Panel. Upon liquidation of GNP, 50% of the LOC1 liability in addition to 50% of all other assets and liabilities of GNP may be recorded on Goldrich’s balance sheet.

The Panel ruled in the Final Post Award that LOC1 cannot be increased for costs incurred after mining operations have ceased, including costs for reclamation. This deprives NyacAU of a security interest in 50% of future placer gold production at the site to repay reclamation expenses which it advances. Further, the Panel ruled that the Operating Agreement does not impose an obligation on the Company to pay 50% of the reclamation fee, but that the reclamation obligation resides with the permit holder.

Right to Offset Damages or Distributions

The Panel granted the request that any damages awarded to one party can be an offset to distributions (or damages) due to the other party.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Judgements issued by Superior Court

On April 29, 2020, the Superior Court of the State of Alaska issued a judgement in favor of Dr. James, in the total amount of $13,713 (for the 2012 reclamation costs personally incurred, including interest) and $83,588 (for the adjustment to Dr. James’ stock purchase, including interest). On June 9, 2020 and June 20, 2020, the Court awarded additional costs and attorney’s fees. The Court ordered both Goldrich and NyacAU to submit a status report to the Court in September 2020 regarding the Panel’s clarification of the payable for the 2012 reclamation, including interest, and to clarify the party for the award, NyacAU or GNP. The status report has been filed by both parties, and these judgements remain unpaid and in force before the Superior Court. These amounts related to these judgements were accrued for at December 31, 2019. As of June 30, 2020, a total amount of $99,071 is included for the judgement and post judgement interest in Accounts payable and Interest payable on the consolidated balance sheet.

9.SUBSEQUENT EVENTS

Subsequent to the six months ended June 30, 2020, the Company entered into additional notes payable totaling $72,000, net of discounts from a related party.

During August through October of 2020, the Company received $439,000 cash as a result of exercise of Class Q, Class S, and Class T warrants at an exercise price of $0.03 per common share. Ownership of these warrants had been in the hands of a related party and were sold by him personally to unrelated parties. The unrelated parties then exercised the warrants for cash, resulting in the issuance of 14,633,330 common shares.

During September of 2020, the holders of the Notes payable and Notes payable – related party, received shares in lieu of cash for interest. A total of 13,719,248 common shares with a basis of $0.015 per share, were issued to the lenders, reducing interest payable by $205,789, of which $168,976 was to a related party.

Arbitration rulings subsequent to June 30, 2020

Final Post Award Orders

On September 4, 2020, the arbitration panel issued Final Post Award Orders, wherein the panel issued rulings on multiple material issues:

·Reclamation:

The Company had previously filed a motion to compel NyacAU to correct accruals for certain expenses including reclamation, demobilization, equipment rental and utilities. Most notably, the Company contended that an accrual for reclamation liability was short of a much larger estimate prepared by independent professionals as engaged by Goldrich. The panel denied the Company’s motion and ruled that Goldrich does not have the authority to compel the establishment of any reserves on the GNP financial records.

The Company had previously filed a motion to compel NyacAU to reclaim the disturbed acres as required under the Operating Agreement and the mining permit issued to NyacAU in 2013, and to require NyacAU to fund the reclamation reserve from cash that had been distributed to NyacAU. The panel denied the Company’s motion and ruled that while there was express provision in the Operating Agreement to establish reserves necessary for contingent or unforeseen liabilities or obligations, which could conceivably include reclamation reserves, the agreement does not impose an express obligation to reclaim the project site.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

·Mining Claims

All of the Company’s mining claims remain the property of the Company; however, NyacAU staked several claims contiguous to the claims owned by the Company. The Company had previously filed a motion to compel the transfer NyacAU’s claims from NyacAU to the Company. The motion was granted in part in that the claims held in NyacAU’s name were ruled to be owned by the Company, but would not be transferred immediately. They would remain in the possession of NyacAU as manager of the liquidation until the property covered by the claims was not being used for liquidation activities and could be transferred without disruption to the liquidation activity.

Supplemental Orders 5-8

On December 4, 2020, the arbitration panel issued Supplemental Orders 5-8, wherein the panel issued rulings on multiple material issues:

·2018 Profitability and 2018 Interim Distributions

Under the GNP Operating Agreement, Goldrich was entitled to receive certain interim distributions based on GNP’s profitability. Goldrich received such distributions for 2016 and 2017. Goldrich challenged the Panel’s understanding of facts related to GNP’s profitability for 2018 as presented in the arbitration proceedings and made a motion for GNP to distribute interim distributions for 2018 after applying the arbitration rulings made to date. Goldrich submitted a claim to the arbitration panel for approximately $680,000 plus prejudgment interest thereon at 5%. The arbitration panel denied Goldrich’s claim. Based on the panel’s ruling, the paydown by NyacAU, as manager of GNP, of Line of Credit 1 (“LOC1”) with GNP funds, rather than the payment of a 2018 interim distribution to Goldrich, is not considered a misappropriation of funds. LOC1 is a related party loan between GNP and NyacAU.

The panel ruled that GNP was dissolved at the end of the 2018 mining season (September 28, 2018) by failing to meet the Minimum Production Requirement of the GNP Operating Agreement rather than May 2019, when NyacAU published a formal notice of dissolution to the State of Alaska and to creditors. Based on this and other evidence, the Panel found that GNP was dissolved by no later than October 9, 2018, which precedes the date by which any interim distribution would otherwise have been due under the GNP Operating Agreement (October 31 - December 31, 2018). Accordingly, the panel ruled that Goldrich is precluded from receiving any interim distributions for 2018 under the GNP Operating Agreement, which provides that “[m]embers have a right to Distributions from the Company before the dissolution and winding up of the Company.”

·Goldrich’s Portion of Interest Paid on LOC1

Under the GNP Operating Agreement, Goldrich is to receive 50% of any interest on LOC1 paid by GNP to NyacAU. Goldrich made a claim to the arbitration panel that GNP had paid interest to NyacAU and that Goldrich was entitled to 50% of the amount paid. The panel ruled that NyacAU is obligated to pay Goldrich 50% of $241,797 in interest “received” by NyacAU up to October 2018, when GNP was dissolved and commenced liquidation, in the total principal amount of $120,883. Goldrich is also entitled to recover 5% prejudgment interest on unpaid LOC1 interest as it fell due. The panel further ruled that LOC1 interest totaled (cumulatively) $3,394.21 as of December 2012; $22,663.46 as of December 2013; $55,632.71 as of December 2014; $101,823.60 as of December 2015; $155,337.06 as of December 2016; $205,817.76 as of December 2017; and $241,797.20 as of October 1, 2018. Goldrich is awarded 12 months of accrued prejudgment interest at 5% per annum on each of these year-end amounts. Goldrich has no entitlement to a share of LOC1 interest beyond this.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

·Clarification of Award

In the Partial Final Award given in 2019, the arbitration panel made an award to NyacAU of $377,253 in damages and pre-award interest relating to 2012 reclamation expenses incurred on Goldrich’s behalf. Goldrich made an “Application for Modification and Correction of Arbitration Award, for Vacation of Award, or for Resubmission to Arbitration Panel for Clarification”, requesting an order from the Alaska court, under the Alaska Arbitration Act, that the damages awarded for unpaid 2012 reclamation expenses were to be paid to GNP, not NyacAU, and that the panel clarify the appropriate amount of damages and interest to be paid. The panel ruled that it will resolve these issues after the parties submit evidence and argument supporting their respective positions on the merits.

Goldrich Mining Company
Consolidated Balance Sheets (Unaudited)	June 30, 2020	December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$ 21,873	$ 1,274
Prepaid expenses	140,622	96,574
Total current assets	162,495	97,848

Property, equipment, and mining claims:
Equipment, net of accumulated depreciation	242	716
Mining properties, claims, and royalty option	626,428	626,428
Total property, equipment and mining claims	626,670	627,144
Total assets	$ 789,165	$ 724,992

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$ 1,781,330	$ 1,656,854
Interest payable	339,741	223,555
Interest payable – related party	692,885	439,121
Related party payable	681,035	600,147
Notes payable	1,062,105	1,020,000
Notes payable – related party	3,517,895	3,246,316
Notes payable in gold	471,709	406,319
Dividends payable on preferred stock	30,618	30,618
Total current liabilities	8,577,318	7,622,930

Long-term liabilities:
Interest payable in stock	36,813	36,813
Interest payable in stock – related party	168,976	168,976
Remediation and asset retirement obligation	259,070	255,951
CARES Act PPP loan	50,600	-
Total long-term liabilities	515,459	461,740
Total liabilities	9,092,777	8,084,670

Commitments and contingencies (Notes 3, 5, 8)
Stockholders' deficit:
Preferred stock; no par value, 8,998,700
shares authorized; no shares issued or outstanding	-	-
Convertible preferred stock series A; 5% cumulative dividends,
no par value, 1,000,000 shares authorized; 150,000 shares issued and outstanding, respectively, $300,000 liquidation preferences	150,000	150,000
Convertible preferred stock series B; no par value, 300 shares authorized, 200 shares issued and outstanding, $200,000 liquidation preference	57,758	57,758
Convertible preferred stock series C; no par value, 250 shares authorized, issued and outstanding, $250,000 liquidation preference	52,588	52,588
Convertible preferred stock series D; no par value, 150 shares
authorized, issued and outstanding, $150,000 liquidation preference	-	-
Convertible preferred stock series E; no par value, 300 shares authorized, issued and outstanding, $300,000 liquidation preference	10,829	10,829
Convertible preferred stock series F; no par value, 300 shares authorized, 153 and 153 shares issued and outstanding, $50,000 liquidation preference	-	-
Common stock; $0.10 par value, 250,000,000 shares authorized; 139,573,798 issued and outstanding, respectively	13,957,380	13,957,380
Additional paid-in capital	13,905,542	13,905,542
Accumulated deficit	(36,437,709)	(35,493,775)
Total stockholders’ deficit	(8,303,612)	(7,359,678)
Total liabilities and stockholders' deficit	$ 789,165	$ 724,992

Goldrich Mining Company Consolidated Statements of Operations (Unaudited)

	Three Months Ended		Six Months Ended
	June 30,		June 30
	2020	2019	2020	2019
Operating expenses (income):
Mine preparation costs	$ 12,440	$ 37,699	$ 94,010	$ 65,475
Depreciation and amortization	237	324	474	654
Management fees and salaries	46,600	54,813	94,069	116,750
Professional services	858	5,638	6,995	40,963
General and administration	80,508	63,179	152,056	112,211
Office supplies and other	2,575	2,264	3,960	3,743
Directors' fees	-	1,200	3,000	9,200
Mineral property maintenance	27,402	22,667	54,805	45,335
Arbitration (Note 3)	60,161	27,420	65,999	(19,303)
Total operating expenses (income)	230,781	215,204	475,368	375,028

Other expense (income):
Miscellaneous income	(2,000)	-	(2,000)	-
Change in fair value of notes payable in gold	42,459	23,971	65,390	33,748
Interest expense and finance costs	242,196	169,681	405,176	383,622
Loss on foreign exchange	-	20	-	20
Total other expense	282,655	193,672	468,566	417,390

Net loss	513,436	408,876	943,934	792,418

Preferred dividends	1,896	1,896	3,792	3,771
Net loss available to common stockholders	$ 515,332	$ 410,772	$ 947,726	$ 796,189

Net loss per common share – basic and diluted	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)

Weighted average common
shares outstanding – basic and diluted	139,573,798	139,573,798	139,573,798	139,573,798

Goldrich Mining Company Consolidated Statements of Changes in Stockholders’ (Deficit) (Unaudited)
2019 Stockholders’ (Deficit)
	Common Stock		Preferred Stock		Additional
	Shares	Par Value	Shares	No Par Value	Paid-in Capital	Accumulated Deficit	Total
Balance, December 31, 2018	139,573,798	$13,957,380	151,053	$271,175	$13,832,978	$(32,890,710)	$(4,829,177)
Warrants issued with note payable					7,754		7,754
Warrants issued for finders fees					25,864		25,864
Net Loss						(383,542)	(383,542)
Balance, March 31, 2019	139,573,798	$13,957,380	151,053	$271,175	$13,866,596	$(33,274,252)	(5,179,101)
Warrants issued with note payable					7,845		7,845
Warrants issued for finders fees					491		491
Net Loss						(408,876)	(408,876)
Balance, June 30, 2019	139,573,798	$13,957,380	151,053	$271,175	$13,874,932	$(33,683,128)	(5,579,641)



2020 Stockholders’ (Deficit)
	Common Stock		Preferred Stock		Additional
	Shares	Par Value	Shares	No Par Value	Paid-in Capital	Accumulated Deficit	Total
Balance, December 31, 2019	139,573,798	$13,957,380	151,053	$271,175	$13,905,542	$(35,493,775)	$(7,359,678)
Net Loss						(430,498)	(430,498)
Balance, March 31, 2020	139,573,798	$13,957,380	151,053	$271,175	$13,905,542	$(35,924,273)	$(7,790,176)
Net Loss						(513,436)	(513,436)
Balance, June 30, 2020	139,573,798	$13,957,380	151,053	$271,175	$13,905,542	$(36,437,709)	$(8,303,612)

Year	Ounces of Placer Gold	Ounces of Fine Gold
2015	4,400	3,900
2016	10,200	8,200
2017	15,000	12,300
2018	20,900	17,100

Exhibit No.		Document
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act
32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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