MINERAL PROPERTIES AND PROPERTIES, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2012

Mineral Properties and Properties, Plant and Equipment [Abstract]

Mineral Properties and Properties, Plant and Equipment [Text Block]

NOTE 6—MINERAL PROPERTIES AND PROPERTIES, PLANT AND EQUIPMENT

	June 30,		December 31,
	2012		2011
Mine and Mill Equipment	$	2,173,628	$	2,173,628
Mineral Properties		2,581,155		2,581,155
	$	4,754,783	$	4,754,783
Less: accumulated depreciation, depletion and amortization		2,173,628		2,173,628
Net carrying value	$	2,581,155	$	2,581,155

There was $119,939 charged to operations for depreciation expense for three month period ended June 30, 2011. As the Company’s mine and mill equipment assets were fully depreciated as of December 31, 2011, no depreciation expense was recorded for the three month period ended June 30, 2012.With the acquisition of the Basin Gulch Project and theJungoProject,we also acquired certain mining claims and permits. The mineral rights obtained resulting from the January 6, 2010 Asset Purchase Agreement executed between the Company andAultraGold, Inc. were fair valued at $2,581,155 and are presented as Mineral Properties on the condensed consolidated balance sheets as of June 30, 2012 and December 31, 2011. Since that time, we have not commenced any mining operations; therefore, we have not recorded any amortization expense related to any capitalized amounts. Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new projects, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of the recoverable amount whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. As of June 30, 2012, the Company does not believe that impairment indicators exist related to its long-lived assets.

The Internal Revenue Service has a Federal lien on the Company’s subsidiary Dutch Mining, LLC’s equipment, real property and leases in the amount of $505,114 as of June 30, 2012 and December 31, 2011. The State of Oregon Department of Revenue, Department of Employment and Bureau of Labor & Industries has a lien on the Company’s subsidiary Dutch Mining, LLC’s personal and real property in the amount of $217,867 as of June 30, 2012 and December 31, 2011. These liens arose from unpaid Federal and state payroll taxes from the closed Benton Mine operation in Oregon. During fiscal 2011, the Company sold certain fully depreciated equipment and applied the proceeds received against the Company’s State of Oregon Department of Revenue payroll liability lien.

The aforementioned unpaid payroll liabilities aggregating $722,981 as of June 30, 2012 and December 31, 2011, are recorded as Payroll Liabilities, under Current Liabilities in the Company’s condensed consolidated financial statements. The Company has accrued for penalties and interest associated with these liens noted above.