Attached files
| file | filename |
|---|---|
| EX-32.1 - CERTIFICATION OF FRED W. BRACKEBUSCH - NEW JERSEY MINING CO | exhibit32-1.htm |
| EX-31.1 - CERTIFICATION OF FRED W. BRACKEBUSCH - NEW JERSEY MINING CO | exhibit31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period _________________ to _________________
Commission file number 000-28837
NEW JERSEY MINING COMPANY
(Name of small business issuer in its charter)
| Idaho | 82-0490295 |
| (State or other jurisdiction | (I.R.S. employer identification No.) |
| of incorporation or organization) |
89 Appleberg Road, Kellogg, Idaho 83837
(Address of principal executive offices) (zip code)
(208) 783-3331
Registrant’s telephone
number, including area code
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, No par value per share
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [
] No [X]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [
] No [X ]
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.
Yes [X] No
[ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer [ ] | Accelerated Filer [ ] |
| Non-Accelerated Filer [ ] | Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act
Yes [
] No [X ]
The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the average of the bid and ask prices on June 30, 2010 was $7,064,000.
On March 1, 2011 there were 45,022,862 shares of the registrant’s Common Stock outstanding.
1
TABLE OF CONTENTS
2
GLOSSARY OF SIGNIFICANT MINING TERMS
Ag-Silver.
Au-Gold.
Alluvial-Adjectivally used to identify minerals deposited over time by moving water.
Argillites-Metamorphic rock containing clay minerals.
Arsenopyrite-An iron-arsenic sulfide. Common constituent of gold mineralization.
Ball Mill-A large rotating cylinder usually filled to about 45% of its total volume with steel grinding balls. The mill rotates and crushed rock is fed into one end and discharged through the other. The rock is pulverized into small particles by the cascading and grinding action of the balls.
Bedrock-Solid rock underlying overburden.
Cu-Copper.
CIL-A standard gold recovery process involving the leaching with cyanide in agitated tanks with activated carbon. CIL means "carbon-in-leach."
Crosscut-A nominally horizontal tunnel, generally driven at right angles to the strike of a vein.
Dip-Angle made by an inclined surface with the horizontal, measured perpendicular to strike.
Deposit-A mineral deposit is a mineralized body which has been intersected by sufficient closely-spaced drill holes or underground sampling to support sufficient tonnage and average grade(s) of metal(s) to warrant further exploration or development activities.
Development Stage-As defined by the SEC-includes all issuers engaged in the preparation of an established commercially mineable deposit (reserves) for its extraction which are not in the production stage.
Drift-A horizontal mine opening driven on the vein. Driving is a term used to describe the excavation of a tunnel.
Exploration Stage-As defined by the SEC-includes all issuers engaged in the search for mineral deposits (reserves) which are not in either the development or production stage.
Fault-A fracture in the earth's crust accompanied by a displacement of one side of the fracture with respect to the other and in a direction parallel to the fracture.
Flotation-A physiochemical process for the separation of finely divided solids from one another. Separation of these (dissimilar) discrete solids from each other is affected by the selective attachment of the particle surface to gas bubbles.
GPT-grams per metric tonne.
Galena-A lead sulfide mineral. The most important lead mineral in the Coeur d'Alene Mining District.
Grade-A term used to assign the concentration of metals per unit weight of ore. An example-ounces of gold per ton of ore (opt). One troy ounce per short ton is 34.28 parts per million or 34.28 grams per metric tonne.
Mill-A general term used to denote a mineral processing plant.
Mineralization-The presence of minerals in a specific area or geologic formation.
Net Smelter Royalty-A royalty, usually paid to a mineral claim owner, that is a percentage of the proceeds from the sale of metal-bearing concentrate or metal to a smelter or refinery. Also known as an NSR, the cost of smelting, refining, and transport to the smelter is deducted before the royalty is applied. However, the cost of mining and milling is not deducted. Typical net smelter royalty rates are from 1% to 5%.
Ore-A mineral or aggregate of minerals which can be mined and treated at a profit. A large quantity of ore which is surrounded by waste or sub-ore material is called an orebody.
Patented Claim-A mineral claim where the title has been obtained from the U.S. federal government through the patent process of the 1872 Mining Law. The owner of the patented claim is granted title to the surface and mineral rights.
Production Stage-As defined by the SEC-includes all issuers engaged in the exploitation of a mineral deposit (reserve).
Pyrite-An iron sulfide. A common mineral associated with gold mineralization.
Quartz-Crystalline silica (SiO2). An important rock-forming and gangue material in gold veins.
3
Quartzites-Metamorphic rock containing quartz.
Raise-An underground opening driven upward, generally on the vein.
Ramp-An underground opening usually driven downward, but not always, to provide access to an orebody for rubber-tired equipment such as loaders and trucks. Typically ramps are inclined at about a 15% grade.
Reserves-That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves are subcategorized as either proven (measured) reserves, for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings, or drill holes, and grade and/or quality are computed from the results of detailed sampling, and (b) the sites for inspection, sampling, and measurement are spaced so closely and geologic character is so well defined that size, shape, depth, and mineral content are well-established; or probable (indicated) reserves, for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, yet the sites for inspection, sampling and measurement are farther apart.
Stope-An underground void created by the mining of ore.
Strike-The bearing or azimuth of the line created by the intersection of a horizontal plane with an inclined rock strata, vein or body.
Tellurium-Relatively rare chemical element found with gold and silver which can form minerals known as tellurides.
Tetrahedrite-Sulfosalt mineral containing copper, antimony, and silver.
Vein-A zone or body of mineralized rock lying within boundaries separating it from neighboring wallrock. A mineralized zone having a more or less regular development in length, width and depth to give it a tabular form and commonly inclined at a considerable angle to the horizontal.
Unpatented Claim-A mineral claim staked on United States Public Domain (USPD) that is open for mineral entry. Unpatented lode claims can be no more than 1,500 feet long by 600 feet wide. The claimant owns the mineral rights, but does not own the surface which is USPD. Any exploration or mining on the claim must first be submitted in a plan of operations (POO) for approval to the appropriate federal land management entity.
Wallrock-Usually barren rock surrounding a vein.
PART I
ITEM 1.
DESCRIPTION OF THE BUSINESS
BUSINESS DEVELOPMENT
With the exception of historical matters, the matters discussed in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties that could cause actual results to differ materially from projections or estimates contained herein. Such forward-looking statements include statements regarding planned levels of exploration and other expenditures, anticipated mine lives, timing of production and schedules for development and permitting. Factors that could cause actual results to differ materially include, among others, metals price volatility, permitting delays, and the Company’s ability to secure funding. Most of these factors are beyond the Company’s ability to predict or control. The Company disclaims any obligation to update any forward-looking statement made herein. Readers are cautioned not to put undue reliance on forward-looking statements.
Form and Year of Organization
New
Jersey Mining Company (“the Company” or “NJMC”) is a corporation organized under
the laws of the State of Idaho on July 18, 1996. The Company was dormant until
December 31, 1996, when all of the assets and liabilities of the New Jersey
Joint Venture (a partnership) were transferred to the Company in exchange for
10,000,000 shares of common stock. The New Jersey Joint Venture, a partnership,
was formed in 1994 to develop the New Jersey mine.
Any Bankruptcy, Receivership or Similar
Proceedings
There have been no bankruptcy, receivership, or
similar proceedings.
Any Material Reclassification, Merger, Consolidation, or
Purchase or Sale of a Significant Amount of Assets Not in the
Ordinary Course of Business.
There have
been no material reclassifications, mergers, consolidations, purchases, or sales
for the past three years.
4
BUSINESS OF THE COMPANY
General Description of the Business
The Company is involved in exploring for and developing gold, silver,
and base metal ore resources in the Pacific Northwest of the USA. The Company
has a portfolio of mineral properties including: the Golden Chest mine, the
Niagara copper silver-deposit, the New Jersey mill, the Silver Strand mine, the
Toboggan exploration project, and several other exploration prospects.
The Company is executing a strategy of mineral exploration that is focused on the Belt Basin area of northern Idaho and western Montana. See Location Map. The Company is primarily focused on gold with silver and base metals of secondary emphasis. The Company modified its strategy in 2010. The former strategy was to conduct exploration for gold, silver and base metal deposits in the greater Coeur d’Alene Mining District of northern Idaho while concurrently conducting mining and mineral processing operations on ore reserves it has located on its exploration properties. The new strategy now de-emphasizes the generation of cash by mining and milling and emphasizes the exploration of its properties in order to increase the amount of reserves before making a production decision. The new financial strategy involves forming joint ventures with partners who contribute cash to earn their interest. The strategy includes finding and developing ore reserves of significant quality and quantity to justify investment in mining and mineral processing facilities.
The new strategy is less reliant on private placements of common stock with qualified investors, though, the Company’s exploration and development progress is still dependant on securing financing in one form or another.
Competitive Business Conditions
The
Company competes on several different fronts within the minerals exploration
industry. The Company competes with other junior mining companies for the
capital necessary to sustain its exploration and development programs. Recently,
the Company has been successful in completing two joint ventures, one at the
Golden Chest mine and the other to expand the throughput capacity of its New
Jersey mill.
We also compete with other mining companies for exploration properties especially for gold properties in the Coeur d’Alene mining district.
The Company also competes for skilled labor within the mining industry.
We are also subject to the risks inherent to the mineral industry. The primary risk of mineral exploration is the low probability of finding a major deposit of ore. We attempt to mitigate this risk by focusing our efforts in an area already known to host ore deposits, and also by acquiring properties we believe have the geologic and technical merits to host potentially economic mineralization. Another significant risk is the price of metals such as gold and silver. If the prices of these metals were to fall substantially, it would, most likely, lead to a loss of investor interest in the mineral exploration sector which would make it more difficult to raise the capital necessary to move our exploration and development plans forward.
Effect of Existing or Probable Governmental Regulations
on the Business
Our business is subject to extensive federal,
state and local laws and regulations governing development, production, labor
standards, occupational health, waste disposal, use of toxic substances,
environmental regulations, mine safety and other matters. The Company is subject
to potential risks and liabilities occurring as a result of mineral exploration
and production. Insurance against environmental risk (including potential
liability for pollution or other hazards as a result of the disposal of waste
products occurring from exploration and production) is not generally available
to the Company (or to other companies in the minerals industry) at a reasonable
price. To the extent that the Company becomes subject to environmental
liabilities, the satisfaction of any such liabilities would reduce funds
otherwise available to the Company and could have a material adverse effect on
the Company. Laws and regulations intended to ensure the protection of the
environment are constantly changing, and are generally becoming more
restrictive.
All operating and exploration plans have been made in consideration of existing governmental regulations. Regulations that most affect operations are related to surface water quality and access to public lands. An approved plan of operations (POO) and a financial bond are usually required before exploration or mining activities can be conducted on public land that is administered by the United States Bureau of Land Management (BLM) or United States Forest Service (USFS).
The New Jersey mine, the Silver Strand mine, and the Golden Chest properties are part of the expanded Bunker Hill Superfund Site. Current plans for expanded cleanup do not include any of our mines. There is no known evidence that previous operations at the New Jersey mine prior to 1910 caused any groundwater or stream pollution or discharged any tailings into the South Fork of the Coeur d'Alene River; however, such evidence could be uncovered. The nature of the risk would probably be to clean up or cover old mine tailings that may have washed downstream from upstream mining operations. No mineral processing operations were ever conducted at the Silver Strand mine and current water sampling data has not indicated any pollution. There are no mineral processing tailings deposits at the Golden Chest mine. However, at least two old adits have small water discharges. The Company could conceivably be required to conduct cleanup operations at its own expense, however, the Environmental Protection Agency’s (EPA) Record of Decision for the Bunker Hill Mining and Metallurgical Complex Operating Unit 3 does not include any cleanup activities at the Company’s mines. Recently, the EPA has proposed a new cleanup plan that greatly increases the number of historic mine sites to be reclaimed, however, the plan has not been approved. NJMC has not received any notifications that it could be liable for any environmental cleanup.
Estimate of the Amount Spent on Exploration for the Last
Two Years
During the years ending December 31, 2010 and 2009,
we have spent $158,223 and $80,733, respectively, on exploration activities.
5
Costs and Effects of Compliance with Environmental Laws
(Federal, State and Local)
No major Federal permits are
required for the New Jersey mine because most operations are on private land and
there are no process discharges to surface waters. Any exploration program
conducted by the Company on unpatented mining claims, usually administered by
the BLM or USFS, requires a POO to be submitted. Our exploration programs can be
delayed for significant periods of time (one to two years) because of the slow
permitting process applied by the USFS. We believe the USFS permitting delays
are caused by insufficient manpower, complicated regulations, misplaced
priorities, and sympathy for environmental groups who oppose all mining
projects.
As an example, the Company submitted a POO to the USFS in April 2003 for a seasonal, underground mining operation at the Silver Strand mine. The USFS conducted an Environmental Assessment (EA) of the plan and requested public comments on the EA in September 2004. In June 2005, the USFS issued a final Decision Notice and Finding of No Significant Impact which essentially approved the Company’s POO, but with 26 stipulations. The stipulations cover various aspects of the plan including, but not limited to, the operating season, public access through the site, water quality monitoring, development rock monitoring, slope stability monitoring, and reclamation standards. In August 2006, both the USFS and the Company signed the final operating plan or Decision Notice. The Company posted a reclamation bond of $119,725 in June of 2007 to begin operations at the Silver Strand. An additional bond of $32,075 is due once haulage of ore from the mine commences which gives a total bond of $151,800 for the planned project. Permit compliance activities at the Silver Strand are expected to cost about $3,500 per year.
The Company is also subject to the rules of the U.S. Department of Labor, Mine Safety and Health Administration (MSHA) for the New Jersey and Golden Chest operations. When an underground mine or mill is operating, MSHA performs a series of regular quarterly inspections to verify compliance with mine safety laws, and can assess financial penalties for violations of MSHA regulations. A typical mine citation order for a violation that is not significant or substantial is about $200.
The New Jersey mine has two important State of Idaho permits. The first is an Idaho Cyanidation Permit and the second is a reclamation plan for surface mining operations. No permit is required for the current flotation process as there is no discharge of water to surface waters and the tailings impoundments are less than 30 feet high from toe to crest. An Idaho cyanidation permit was granted October 10, 1995 [No. CN-000027]. Construction of the Concentrate Leach Plant (CLP) at the New Jersey mine was completed in November of 2007. The Idaho Cyanidation permit requires monthly surface water and quarterly groundwater monitoring during the operation of the CLP. It is estimated that water monitoring cost associated with operating the CLP will be approximately $6,000 per year.
A surface mining reclamation plan for the New Jersey mine was approved by the Idaho State Department of Lands in 1993. The plan calls for grading of steep fill slopes and planting of vegetation on the area disturbed by the open pit mine. An annual reclamation fee of $133 is paid to the Idaho Department of Lands for surface disturbance associated with the New Jersey mine open pit. The Company has estimated its costs to reclaim the New Jersey mine site to be $21,000.
When the Company plans an exploration drilling program on public lands, it must submit a POO to either the BLM or USFS. Compilation of the plan can take several days of professional time and a reclamation bond is usually required to start drilling once the plan is approved. Bond costs vary directly with surface disturbance area, but a small, single set-up drilling program usually requires a bond amount of about $5,000. If a plan requires road building, the bond amount can increase significantly. Upon completion of site reclamation and approval by the managing agency, the bond amount is returned to the Company.
Pursuant to Section 1503(a) of the recently enacted 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 fiscal year ended December 31, 2010, the Company had 3 such specified health and safety violations, orders or citations, remedied during the 2010 year, which resulted in $508 in penalties being remitted to the Mine Safety and Health Administration. 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.
The Company complies with local building codes and ordinances as required by law.
Number of Total Employees and Number of Full Time
Employees
The Company's total number of employees is 12
including President Fred Brackebusch and Vice President Grant Brackebusch.
REPORTS TO SECURITY HOLDERS
The Company is not required to deliver an annual report to shareholders, however, it plans to deliver an annual report to shareholders in 2011. The annual report will contain audited financial statements. The Company may also rely on the Internet to deliver annual reports to shareholders.
The Company filed a Form 10-SB with the Securities and Exchange Commission on January 11, 2000. The filing became effective on January 27, 2000. The Company has filed the required annual 10K reports, quarterly 10-Q reports, and 8-K reports since that time.
The public may read a copy of any materials the Company files with the SEC at the SEC's Public Reference Room at 100 F Street, NE., Washington, D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission and SEC.
The Company maintains a website where recent press releases and other information can be found. A link to the Company’s filings with the SEC is provided on the Company’s website-www.newjerseymining.com.
6
ITEM 2.
DESCRIPTION OF PROPERTIES
Figure 1 - Project Location Map
NEW JERSEY MINE
Location
The New Jersey mine is an
underground mine and mill complex located four kilometers east of Kellogg,
Idaho, in the Coeur d'Alene Mining District. The property includes the gold
bearing Coleman vein system, a base metal Sullivan-type prospect known as the
Enterprise, and another gold prospect called the Scotch Thistle. The mine is
adjacent to U.S. Interstate 90 and is easily accessed by local roads throughout
the entire year. Three phase electrical power is supplied to the New Jersey mill
by Avista Utilities. The area is underlain by argillites and quartzites of the
Prichard Formation [member of Belt Supergroup] which commonly hosts gold
mineralization.
Mineral Property
The Company owns 62
acres of patented mining claims, mineral rights to 108 acres of fee land, and
approximately 130 acres of unpatented mining claims. The unpatented claims are
on federal land administered by the BLM. The Coleman pit and the current
underground workings are located on the patented mining claims wholly owned by
the Company.
Mineral Leases
A mineral lease from
William Zanetti in the New Jersey mill area contains about 60 acres. The lease
provides for the Company's exploration, development and mining of minerals on
fee land through October 2008 and thereafter as long as mining operations are
deemed continuous. The lessor may terminate the lease upon the Company's failure
to perform under the terms of the lease. The land covered by this lease was
purchased and the lease was terminated in January of 2011. Please see Note 13 to
Financial Statements, Subsequent Events.
A second mineral lease, known as the Grenfel lease, with Mine Systems Design, Inc. (MSD) covers the mineral rights to 68 acres located north of the New Jersey mine area. The lease has a fifteen year term and thereafter so long as mining operations are deemed continuous. The lessor may terminate the lease upon the Company's failure to perform under the terms of the lease. A 3% net smelter return (NSR) royalty will be paid to the lessor if production is achieved. However, the NSR royalty shall not exceed 10% of the net proceeds, except the NSR royalty shall not be less than 1%. No advance royalties or other advance payments are required by this lease.
7
History
There are at least 14 gold
prospects in or near the New Jersey mine area. In the late 1800’s and early
1900’s more than 2,500 feet of development workings including drifts, crosscuts,
shafts, and raises, were driven by the New Jersey Mining and Milling Company (an
unrelated company) to develop the Coleman vein and the northwest branch of the
Coleman vein. A 10 stamp gravity mill was built and operated for a short period.
Present Condition and Work Completed on the
Property
A 100 tonne per day flotation mill has been built
and commissioned on the New Jersey mine property. A six foot by six foot ball
mill is used to grind crushed ore. The crushing plant and grinding circuit were
built in 1996, and the flotation circuit was built in 2004. Construction of a
Concentrate Leach Plant “CLP” was started in mid-2006, and was completed in
November of 2007. The CLP plant uses cyanidation and direct electro-winning to
produce a gold-silver dore’ from gold-bearing pyrite concentrates. Based on
leach cycles for the Golden Chest pyrite concentrate, the capacity of the leach
plant is about 10 tonnes per day.
Since 2001, the Company has drilled 14 holes for a total of 1,765 meters to explore the Coleman vein and associated zones of gold mineralization. The drilling confirmed the continuity of the Coleman vein system and discovered a broad zone of low grade (0.70 gpt gold) gold mineralization known as the Grenfel zone. Ore reserves on the Coleman vein were not increased as the drilling was too widely spaced to meet the criteria for a reserve calculation. The best intercept was in DDH02-02 which assayed 2.76 gpt gold over 12.5 meters including 2.5 meters of 6.80 gpt gold. In 2008, about 400 meters of drilling was completed at the Scotch Thistle gold prospect revealing areas of silica enrichment and alteration, but no economic intervals of gold mineralization.
In 2008, the Company completed an underground exploration program of drifting on the Coleman vein on the 740 level. A total of 84 meters of drifting were completed with 20 meters of that on the vein before it was displaced by a fault. No exploration or development work was completed by the Company in 2009. In 2010, a raise was driven upward on the 740 level to explore a narrow high-grade vein that crosscut the main Coleman vein at nearly a right angle. This raise was driven about 12 meters vertically and produced 367 dry tonnes for the New Jersey mill that assayed 2.68 gpt gold.
As of December 31, 2010, the Company had a capital cost of $1,143,511 associated with the mineral processing plant and a capitalized development plus investment cost of $604,792 associated with the mine.
Exploration Plans
There are currently
no plans for exploration or mining at the New Jersey mine property.
Geology and Reserves
The description
of the geology of the New Jersey mine and the calculation of mineral resources
have been completed by the Company. The description of the geology of the area
can be verified from third party published reports by the U.S. Geological Survey
and unpublished reports by Oscar Hershey, former Coeur d'Alene District
geologist. The Company is solely responsible for the reserve calculations.
Geology
The Prichard Formation, which
is 25,000 feet in thickness, underlies the New Jersey mine area which is
adjacent to and north of the major Osburn fault. The Prichard Formation is
divided into nine rock units of alternating argillites, siltites, and
quartzites, and the units exposed in the New Jersey mine area appear to belong
to the lower members. Gold mineralization is associated with sulfide-bearing
quartz veins which cut the bedding in Prichard argillite and quartzite.
Associated sulfides are pyrite, arsenopyrite, chalcopyrite, low-silver
tennatite, galena, and sphalerite.
Reserves
The reserves at the New
Jersey mine, as of this date, are those contained in an underground mine plan.
The designed stope block extends from the surface to the Keyhole Tunnel level.
Grade estimation for the block is based upon calculated head grades from
production from the Coleman vein over the past two years.
Underground Mine (Proven & Probable)
| Ore Block | Metric Tonnes | Gold Grade (grams per tonne) | Ounces (gold) |
| Total | 51,604 | 3.20 | 5,310 |
The reserve tonnage is diluted. That is, the expected dilution from underground mining is accounted for in the grade and tonnage of the reserve block. The ounces stated in the above table are contained ounces. The cutoff grade used was 1.5 grams/tonne gold. The cutoff grade is based on historical costs of underground mining on the Coleman vein with a flotation processing plant recovering 85% of the gold. Gold prices used are based upon a three year average or $32.89/gram ($1,022.95/troy ounce). Proven and probable reserves are combined as they cannot be readily separated.
8
SILVER STRAND MINE
Location
The Silver Strand mine is an
underground mine located in Kootenai County, Idaho, about 20 kilometers
east-northeast of Coeur d'Alene, Idaho. It is situated on Lone Cabin Creek, a
tributary of Burnt Cabin Creek and of the Little North Fork Coeur d'Alene River.
Primary access is from Coeur d'Alene via paved and dirt roads from Fernan Lake
to Lone Cabin Creek.
Mineral Property
The Company's Silver
Strand mine consists of fifteen unpatented lode claims wholly owned by the
Company. The claims are on public lands administered by the U.S. Forest Service.
The claims were acquired from Trend Mining Company pursuant to a purchase
agreement dated July 14, 2000. Mine Systems Design, Inc. assumed Trend’s royalty
on the Silver Strand claims in July 2001. The royalty is a 1.5% NSR capped at
$50,000 after which the NSR royalty decreases to 0.5% .
History
The Silver Strand deposit was
discovered during nearby logging activity during the 1960's and mined during the
1970's and 1980's for siliceous smelter flux. Production was 13,752 tons grading
0.093 ounces per ton gold (3.19 gpt), 9.6 ounces per ton silver (329 gpt) and
87.1% silica. The mining operation was shut down when the ASARCO Tacoma smelter
closed in the early 1980's. Previous owner/operators include Silver Strand
Mining Company, Silver Trend Mining Company, and Trend Mining Company. Mine
Systems Design, Inc. (MSD) had an exploration agreement with Silver Trend Mining
Company that was terminated in 1997. During the term of that lease, MSD made an
agreement with U.S. Bureau of Mines (USBM), Spokane Research Center to conduct a
mining research project at the Silver Strand mine. The USBM monitored water
quality and flows from the mine, maintained the underground openings, and
conducted some diamond drilling.
Present Condition and Work Completed on the
Property
During 2002, the Company completed an exploration
drilling program which was successful in extending the ore shoot below the No. 3
Level. Given the successful drilling results, the Company initiated the
environmental permitting process for a 1,000 tonne per month seasonal,
underground mining operation. In April 2003, the Company submitted a POO to the
USFS. In June 2005, the USFS affirmed their original Finding of No Significant
Impact with respect to the Company’s POO after an environmental group appealed
their earlier decision. In August 2006, both the USFS and the Company signed the
final operating plan or Decision Notice.
In May of 2007, the Company posted a reclamation bond of $119,725 in order to begin work at the Silver Strand. Work completed at the Silver Strand in 2008 included the completion of the new No. 3 portal. In 2009 no work was completed except for required environmental monitoring. In 2010, the Company started mining operations at the Silver Strand, but mining was suspended after poor metallurgical recoveries were experienced leaching the concentrate in the concentrate leach plant. The concentrate leaching problem was later resolved by laboratory testwork. A total of 112 tonnes were processed at the mill. No surface infrastructure presently exists at the Silver Strand. There is no energy available at the site, and electrical energy requirements are satisfied with an on-site generator.
As of December 31, 2010, the Company had a capitalized development plus investment cost of $152,576 associated with the Silver Strand mine.
Exploration and Development Plans
The
Company plans to sell its interest in the Silver Strand mine and focus its
efforts on the Golden Chest mine.
Geology and Reserves
Company
geologists have completed the description of the geology of the Silver Strand
mine. Reserve calculations were completed by the Company’s geologists and
engineers. Verification of the area’s geology can be found from third party
published reports by Alfred L. Anderson of the Idaho Bureau of Mines and Geology
(Pamphlet 53).
Geology
The upper part of the Revett
Formation outcrops at the mine. The upper Revett member contains alternating
sequences of quartzite and siltite-argillite. Beds dip shallowly to moderately
to the north (30 to 50 degrees). Alfred L. Anderson of the Idaho Bureau of Mines
and Geology mapped the geology and discussed the mineral resources of Kootenai
County in 1940 (Pamphlet 53). There are no large intrusive rock bodies near the
Silver Strand mine except for a diabase dike which has intruded the Silver
Strand mineralized zone. The Burnt Cabin fault is the major geologic structure
near the Silver Strand mine.
The Silver Strand orebody consists of a nearly-vertical, silicified (quartz) replacement zone which cuts the flat to moderately dipping Revett beds. The zone is not a fissure-filling vein. The boundaries and shape of the silicified zone were determined to some extent by a 1997 diamond drilling program completed by a previous operator. The sulfide ore mined to date appears to be enclosed within the quartz zone. The ore is black and very fine-grained. Sulfide minerals are not easy to identify because of the fine-grained texture. Minerals observed by microscopic study during metallurgical tests include: pyrite, tetrahedrite, tennantite, sphalerite, arsenopyrite and stibnite.
Reserves
Ore grades and dimensions of
the reserve blocks are based on chip sampling of the vein underground and
diamond drilling. Reserves were calculated using a gold equivalent cutoff grade
of 5 grams per tonne gold and a minimum mining width of 1.5 meters. The cutoff
grade is based on historical and estimated costs of a 1,000 tonne/month
underground mining operation, hauling ore to the Company’s mineral processing
plant about 40 miles distant, and processing with flotation and recovering 75%
of the silver and gold. Silver and gold prices used are based upon a three year
average or $0.53/gram ($16.62/troy ounce) and $32.89/gram ($1,022.95/troy
ounce), respectively.
9
| Classification | Metric Tonnes | Gold Grade | Silver Grade | ||
| Grams Per Tonne | Ounces Per Ton | Grams Per Tonne | Ounces Per Ton | ||
| Proven & Probable | 6,903 | 5.43 | 0.158 | 361 | 10.5 |
The reserve tonnages are diluted. That is, the expected dilution from underground mining is accounted for in the grade and tonnage of the reserve blocks. Proven and probable reserves are combined as they cannot be readily separated.
GOLDEN CHEST
Location
The Golden Chest mine is an
underground mine located in Reeder Gulch about 2.4 kilometers east of Murray,
Idaho along Forest Highway 9. The property consists of 24 patented mining claims
and 21 unpatented claims covering approximately 560 acres. The site is
accessible by an improved dirt road. A 30 ft by 20 ft steel-clad pole building
is present near the ramp portal and is used as a shop and a dry. Single phase
electrical power supplied by Avista Utilities has been installed to the portal
site in Reeder Gulch.
Property Ownership
Prior to December 2010 the
Company held two mining leases for the Golden Chest
On January 3, 2005, the Company signed a mining lease on the Golden Chest with Metaline Contact Mines (MTLI) and J.W. Beasley Interests, LLC (JWBI) that covers about 270 acres. The Company completed a pre-feasibility study on an open pit resource drilled by Newmont Exploration Limited and issued 50,000 shares of its restricted common stock to both MTLI and JWBI to exercise the mining lease. The term of the lease is fifteen years and as long thereafter as Leased Substances are mined, processed or marketed from the property. A NSR royalty of 3% is payable to the Lessors. An additional NSR royalty up to a maximum 3% is payable based on a sliding scale of increasing gold prices adjusted by the CPI using June 2003 (CPI=183.7) as the base.
Additionally, the Company will issue 50,000 shares of restricted common stock for each increment of 10,000 troy ounces of gold production. Production to date under the Mining Lease Agreement has been 1,471 ounces of gold.
On January 3, 2005, the Company signed a mining lease with Prichard Creek Resource Partners, LLC that covers about 41 acres of unpatented lode claims. Upon exercising the lease the Company issued 30,000 shares of restricted common stock to Prichard Creek Resource Partners. The term of the lease is fifteen years and as long thereafter as Leased Substances are mined, processed or marketed from the Leased Premises. A NSR royalty of 3% is payable to the Lessors. An additional NSR royalty is based on the same sliding scale, presented in the table above, is also payable to Prichard Creek Resource Partners. Finally, if commercial production is commenced from these claims a one-time payment of 30,000 shares of the Company’s common stock is payable to Prichard Creek Resource Partners.
As of December 2010 the Golden Chest is owned by Golden Chest LLC (GC) which is owned 50% by the Company (NJMC) and 50% by Marathon Gold Corporation through its wholly owned US subsidiary Marathon Gold USA Corp. (MUSA). GC purchased the mine from the lease holders for $3,750,000 and paid $500,000 on the closing date of December 16, 2010, and has agreed to pay the sellers $500,000 each year for the next six years and a final payment of $250,000 on the seventh anniversary. The sellers have a first mortgage on the mine as security for future payment owing.
In order to form Golden Chest LLC in December 2010, NJMC contributed to GC certain mining claims it owned, all geological data and certain mining equipment. Also in consideration for its interest in GC, NJMC terminated, for the benefit of GC, two operating leases it held on the mine. MUSA has contributed $1,000,000 cash and has agreed to contribute i) $500,000 by March 31, 2011, ii) $500,000 by June 30, 2011, iii) $1,000,000 by September 30, 2011 and vi) $1,000,000 by November 30, 2011 for a total cash contribution of $4 million. If MUSA does not make all of the $4M payments to GC, its 50% ownership interest will be reduced proportionally. MUSA has the right to contribute an additional $3.5 million by November 30, 2012 to take its ownership interest to 60% of GC. MUSA also has the option to accelerate any of these contributions.
Present Condition and Work Completed on the
Property
The Company started work on the property in 2004. A
ramp 440 meters in length connecting the surface to the historic No. 3 level,
known as the North Ramp, was completed in the fourth quarter of 2008. The
Company has constructed a development rock storage site, a shop building,
improved the access road, and installed electrical power to the site.
For each year from 2004 through 2008, the Company completed an exploration core drilling program on the Golden Chest property. A total of 3,415 meters of core drilling has been completed from the surface. The majority of these holes were targeted at extending the Idaho vein below the No. 3 and were successful. In June of 2010, the Company drilled a shallow core hole in the Katie-Dora area and intercepted a narrow, high-grade vein in the hanging wall of the Idaho fault. The intercept assayed 865 gpt over 0.27 meters. An exploration drift and raise were mined from the ramp to the projection of this drill intercept. Difficult ground conditions including caving and wet ground made it unsafe to continue the raise to the intercept, and mining activity was suspended in September.
The Company completed studies in 2007 on a potentially open pitable resource drilled by Newmont in the 1980’s. Handbook and scaled costs were used in conjunction with current gold prices and three-year average prices. It was concluded that the open pit resource would not be feasible as a stand-alone project and does not meet the SEC Guide 7 requirements for reserves.
As of December 31, 2010, the Company had a capitalized development plus investment cost of $553,205 associated with the Golden Chest mine.
10
Exploration and Development Plans
The
exploration and development plan for the Golden Chest will consist of both
surface and underground core drilling as well as underground development. About
7,200 meters of surface drilling and 3,600 meters of underground drilling are
planned for 2011. Underground rehabilitation of the No. 3 is also planned to
provide drill rig access to the northern part of the mine. The goals of the
drilling program will be to increase the density of drilling on the surface for
a Canadian NI 43-101 compliant resource estimate and also to extend the
mineralization down dip. An underground mapping and sampling program will also
be undertaken.
Geology and Reserves
Company
geologists have completed the description of the geology of the Golden Chest
mine. Reserve calculations were completed by the Company’s geologist and
engineer. Verification of the area’s geology can be found from third party
published reports by Philip J. Shenon (Idaho Bureau of Mines Pamphlet No. 47)
and unpublished reports by Newmont Mining Corporation.
Geology
Gold mineralization occurs in
veins associated with a thrust fault that has exploited the top of a quartzite
unit on the east limb of a north-trending synclinal fold. The mineralization
occurs in two types of quartz veins which are generally conformable to bedding
of the Prichard Formation of Proterozoic age. Thin banded veins, occurring in
argillite, contain visible gold, pyrite, arsenopyrite, galena, and sphalerite.
Thicker, massive veins occur in quartzite and contain pyrite, sphalerite,
galena, chalcopyrite, scheelite and rare visible gold. Gold mineralization is of
Mesozoic age and related to granitic intrusive rocks.
Reserves
Ore grades and dimensions of
the reserve block are based on ten diamond drillholes through the Idaho vein
with an average spacing of 40 meters and 30 drift samples. Reserves were
calculated by the Company’s geologist and chief mine engineer using a polygonal
method with a cutoff grade of 2.0 gpt gold, and a minimum mining width of 2
meters.
The reserves were calculated using estimated costs and operating parameters of a 100 tonne-per-day underground mining and mineral processing operation. The estimated costs are based on the Company’s actual costs of mining and processing ore from the Golden Chest. Overall metallurgical recovery of gold is expected to be 92% based on the Company’s experience at the New Jersey mill and CLP. Gold prices used are based upon a three year average or $32.89/gram ($1,022.95/troy ounce).
| Classification | Metric Tonnes | Gold Grade (grams per tonne) | Ounces of Gold |
| Proven & Probable | 242,058 | 5.10 | 39,694 |
The reserve tonnages are diluted. That is, the expected dilution from underground mining is accounted for in the grade and tonnage of the reserve blocks. Proven and probable reserves are combined as they cannot be readily separated.
NIAGARA PROJECT
Location
The Niagara copper-silver
deposit is located near the forks of Eagle Creek about seven kilometers
northwest of the Company's Golden Chest operation. The property is without known
ore reserves, and consists of 39 unpatented claims that cover about 775 acres.
Access to the site is maintained through the use of a USFS road which is closed
to the general public. No electrical energy is present at the site.
Mineral Agreement
The Company signed
an exploration agreement with Revett Metals Associates (“RMA”) in December 2006.
The exploration agreement has a term of five years, beginning on December 2,
2006, and is for nine unpatented claims that cover the deposit. In addition, the
exploration agreement covers an area of mutual interest within ½ mile of the
property excluding properties which are valued primarily for their gold
mineralization. Upon signing the agreement, the Company issued 30,000 shares of
restricted common stock to RMA and paid $4,500. At each anniversary of the
signing, the Company has agreed to pay $3,000 and issue 30,000 shares of
restricted common stock to RMA. Any time prior to the expiration of the
exploration agreement, the Company can exercise an option to convert the
exploration agreement to a mining agreement. If exercised, the mining agreement
would have a term of 25 years, and the Company would pay a NSR royalty to RMA of
3.0% on ores or concentrates mined on the property. The Company is granted the
option to purchase 90% of the NSR royalty from RMA for $2,500,000 which would
leave a remaining royalty of 0.3% .
As part of the terms of the Company’s Toboggan Exploration Joint Venture agreement with Newmont Mining Corporation, Newmont retains an option to include the Niagara property into the Toboggan Project which is exercisable starting March 20, 2009 and extending for two years. If Newmont elects to include the Niagara property, it would be required to spend at least another $1,000,000 or twice what NJMC spends on exploration of the Niagara, whichever is greater, to earn its 51% interest.
History
An exploration program
completed by Earth Resources Company on the Niagara property in the 1970's
identified a large volume of copper-silver mineralization within the Revett
formation. Their exploration program included eight drill holes and six trenches
on the outcrop of the mineralized strata. Earth Resources also completed
metallurgical testwork that indicated conventional flotation will achieve
recoveries of 94% for copper and 90% for silver. Earth Resources also completed
preliminary economic studies on the deposit. Kennecott owned the claims that
cover the Niagara deposit for a period of time after Earth Resources. RMA
re-staked the property in 2004 after Kennecott dropped the claims.
11
Present Condition and Work Completed on the
Property
During 2008, the Company completed five holes of
core drilling for a total of 1,062 meters at the Niagara project. Three of the
holes were targeted to intercept the copper-silver deposit in the Revett
formation and were successful. The drilling increased the area of copper-silver
mineralization of the Niagara deposit. As an example, drillhole 08-9 drilled
through 19.4 meters grading 0.51% copper, 25 gpt silver and 0.029 gpt gold. A
preliminary engineering study assessing the economic potential of open pit
mining at the Niagara was completed. Two holes for a cumulative total of 413
meters were drilled in the hanging wall of the Murray Peak fault in the Prichard
formation to investigate a gold-in-soil anomaly and magnetic high. Low level,
anomalous gold and tellurium mineralization were found by this drilling.
Also during 2008, the Company staked claims over an area of gold-telluride mineralization near the Niagara deposit and known as the Progress prospect. Soil sampling indicates a gold anomaly 80 meters wide and 350 meters long. A series of old prospect trenches and adits were found and sampled. No work was completed at the Niagara in 2010.
Exploration and Development Plans
The
Company has submitted a POO to the USFS for a core drilling program at the
Progress gold prospect. The POO is scheduled for approval by the USFS in May of
2011, but the timing of the drilling will be dependent on the Company’s ability
to raise funds.
As of December 31, 2010, the Company had an investment cost of $52,500 associated with the Niagara project.
Geology
The Niagara deposit occurs in
a section of mineralized upper Revett Formation near the axis of a north-south
striking syncline. The western limb of the syncline has been truncated by the
north-south striking Murray Peak fault, a steep, west dipping reverse fault.
Other faults offset the mineralized zone slightly. In the Niagara deposit, the
mineralization occurs in the upper Revett Formation, which here is a light gray,
massive quartzite with thin siltite interbeds. The mineralized horizon crops out
along the East Fork Eagle Creek and is approximately 30 meters below the contact
with the overlying St. Regis Formation. Copper minerals include bornite,
chalcopyrite, chalcocite, native copper, and some copper oxide minerals. Silver
minerals include stomeyerite and jalpaite. Pyrite and galena also occur in trace
amounts
TOBOGGAN PROJECT
Location
The Toboggan project is an
exploration property without known ore reserves. The Toboggan project is a joint
venture with Newmont North American Exploration Limited, a subsidiary of Newmont
Mining Corporation (NYSE: NEM), exploring for gold deposits within a 38 square
mile area north of Murray, Idaho. The project consists of 414 unpatented lode
claims covering an area of approximately 8,000 acres in and near the East Fork
of Eagle Creek drainage. The Toboggan project consists of the following
prospects: Gold Butte, Mineral Ridge, Golden Reward, Progress South, and
Independence. The claims can be accessed from May through November using a USFS
dirt road. No electrical energy is available at the site.
Mineral Agreement
On March 25, 2008,
the Company announced that it signed a definitive agreement with Newmont North
American Exploration Limited, a subsidiary of Newmont Mining Corporation (NYSE:
NEM) under which the parties created a joint venture, the Toboggan Project, to
explore for gold deposits within a 38 square mile area north of Murray, Idaho.
Under the terms of the agreement, Newmont can earn a 51% interest in the joint
venture by spending $2,000,000 over three years. Newmont can increase its
interest to 70% by spending an additional $10,000,000 or completing a
feasibility study in the years four through seven, whichever comes first.
As part of the terms of the agreement, Newmont retains an option to include the Niagara property into the Toboggan Project which is exercisable starting March 21, 2009, and extends for two years. If Newmont elects to include the Niagara property, it would be required to spend at least another $1,000,000 or twice what NJMC spends on exploration of the Niagara, whichever is greater, to earn its 51% interest.
History
Historic workings are present
at the Gold Butte prospect and consist of seven adits connected by a system of
narrow roads. Most of the underground work appears to have been completed by
1941. Two holes were drilled on the Gold Butte prospect in the 1980’s. Prior
geophysical exploration work by Cominco-American in the Toboggan Creek area in
the mid 1980’s found a large CSAMT geophysical anomaly, roughly two square
kilometers in area. In 1987, Cominco American drilled a hole 500 meters in depth
that was located on the eastern edge of the anomaly. It appears that the hole
was located too far to the east, and that it was not drilled deep enough to
investigate the large geophysical anomaly. Nord-Pacific completed a gold
exploration program in the Mineral Ridge area including a soil sampling program
and a reverse-circulation drilling program in 1992. Nord-Pacific identified
several anomalous gold zones with their soil sampling and completed nine holes
totaling 850 meters in their drilling program. All of the drillholes intercepted
anomalous gold mineralization including a 1.5 meter intercept of 18.9 gpt gold.
Historic workings at the Mineral Ridge prospect, which were completed before
Nord-Pacific’s work, include six adits as well as numerous pits and trenches.
The Independence area was originally staked in 1906 and was active
intermittently through the 1900’s. Work completed included four adits, and
numerous pits and trenches.
Present Condition and Work Completed on the
Property
During 2008, Newmont completed a comprehensive early-stage
exploration program. Work completed included the staking of additional claims
significantly increasing the area of the joint venture, soil sampling, rock
sampling, geologic mapping, a ground-based geophysical survey at the Gold Butte,
and an airborne geophysical survey over the entire joint venture area. During
2009, Newmont completed a core drilling program that consisted of six holes for
a total of 1,359 meters. Two holes were drilled at each of the following
prospects: Mineral Ridge, Golden Reward and Gold Butte. The best gold intercept
drilled was at the Gold Butte where a pyritic quartz vein was found at 24.0
meters below the surface that assayed 2.5 gpt gold over 4.0 meters including a
higher grade section that assayed 7.15 gpt gold over 1.0 meter. Thick intercepts
of anomalous, but low-grade gold mineralization were drilled at the Mineral
Ridge and the Golden Reward prospects. Newmont also completed geologic mapping, surface
rock sampling, soil sampling, and additional claim staking. During 2010, Newmont
completed both core and reverse-circulation (RC) drilling at the Toboggan
project. A total of eight core holes totaling 914.2 meters and seven RC holes
totaling 941 meters were drilled. Six of the core holes were drilled at Gold
Butte and intercepted a fault with anomalous gold mineralization. The remaining
two core holes were drilled at Mineral Ridge and both holes were terminated
before hitting the target due to difficult ground conditions. The seven RC holes
were drilled at various prospects near Toboggan Creek and RC-7 was the most
promising with 100 meters of 100 ppb gold at the Golden Reward prospect.
Unfortunately, Newmont was unable to obtain the required USFS permit to drill
their highest priority targets.
12
Exploration and Development Plans
The
exploration plan for the Toboggan project is unknown at this time.
Geology
Gold mineralization tends to
occur in structurally controlled zones within the Prichard Formation which are
associated with large potential feeder structures such as the Murray Peak fault,
the Bloom Peak fault, and the Niagara fault. The gold mineralization can occur
either as discrete, high-grade quartz veins or within wide zones of brecciation.
Geochemical analysis of soils and rocks has led to the discovery of very high
levels of tellurium associated with zones of higher grade gold mineralization.
Electron microprobe analysis has shown the presence of gold-silver electrum and
the telluride mineral petzite. The presence of telluride minerals along with the
presence of alkaline intrusive rocks and areas of potassic alteration has led
the Company to believe the gold mineralization is associated with a deeply
buried alkaline intrusion. Alkaline rocks are a type of igneous intrusive rock
characterized by high potassium and sodium and frequently associated with gold
mineralization.
GIANT LEDGE
The Giant Ledge prospect is an exploration project without known ore reserves. It lies about six kilometers southeast of Murray, Idaho, in the Granite Creek drainage and is accessed by an historic road that has been washed out in areas. No electrical power is present at the site. The Company’s land position consists of 29 wholly owned unpatented lode claims covering an area of 586 acres. The property hosts polymetallic lead, copper and gold mineralization in and along the contact of an igneous intrusive.
History
The Giant Ledge prospect was
active in the 1920’s when a 122 meter deep shaft was sunk and about 450 meters
of drift development was completed. A flotation mill was erected and a minor
amount of production was achieved. Bunker Hill Mining Company examined and
mapped the mine workings in the 1950’s. Sunshine Mining Company conducted
exploration at the Giant Ledge in the mid-1980’s and drilled two core holes.
Present Condition and Work Completed on the
Property
NJMC was able to procure the core from Sunshine’s drilling
program, and the core was re-logged and assayed. The best of the mineralization
showed 4.6 meters of 0.908 gpt gold and 0.24% combined copper and lead. An
extensive soil sampling program was completed in conjunction with a VLF and
magnetometer survey. Results of the soil sampling show a 600 meter diameter gold
anomaly and the magnetometer survey shows a magnetic low coincident with the
gold anomaly. No work was completed at the Giant Ledge property in 2010.
Exploration and Development Plans
If sufficient
funds are available, the Company will perform a ground-based geophysical survey
utilizing induced polarization (IP).
MAC PROSPECT
The Mac prospect is an exploration project without known ore reserves. It lies about three kilometers northwest of Murray, Idaho and is accessed by USFS dirt roads. No electrical power is present at the site. The Company’s land position at the Mac Prospect consists of 32 wholly owned unpatented lode claims covering an area of 528 acres. The Mac is a gold exploration project hosted within the rocks of the Prichard formation and geochemical analysis of the gold mineralization indicates anomalous levels of tellurium similar to prospects within the Toboggan Joint Venture. Historic placer and underground mining has taken place on the property, although it is not well documented. Work completed by the Company in 2008 included claim staking, soil sampling, geologic mapping and rock sampling. No work was completed on the Mac prospect in 2010. Exploration plans are dependent on the Company’s ability to raise funds, but may include more soil sampling and geologic analysis to define core drilling targets.
COPPER CAMP
Summary
The Copper Camp is an exploration
project without known ore reserves. Copper Camp lies about eight kilometers
northwest of Murray, Idaho and is accessed by the Lost Creek USFS road.
Electrical power is located adjacent to the site. The Company signed an
exploration agreement with RMA in December of 2007 which covers nine unpatented
claims with an area of about 180 acres. Terms of the agreement call for an
exploration period of five years, and during or at the end of the exploration
period NJMC can decide to enter a mining agreement. Upon entering a mining
agreement, NJMC could exercise an option to buy 90% of the royalty interest for
$2.5 million or NJMC could decide to pay the full Net Smelter Royalty of 3% on
any production with annual minimum royalty requirements. Upon signing of the
agreement, the Company issued 30,000 shares of restricted common stock plus
$4,500. During the subsequent five-year exploration period, the required annual
payments are 30,000 shares and $3,000.
13
The Copper Camp showing is an early-stage copper and silver exploration project, having been explored with limited drilling by previous operators which include Kennecott, Cominco, and U.S. Borax. Previous operators drilled core holes down dip from the outcrop and three holes penetrated the favorable Revett Formation beds showing low-grade copper-silver mineralization. At least three intercepts were made averaging 10 meters in thickness and grading 0.10% to 0.20% copper and 1.7 to 3.3 grams per tonne (gpt) silver. One short 0.18 meter interval at 173.2 meters of depth had structurally controlled bornite mineralization grading 4.45% copper and 84.0 gpt silver. The Company has submitted a POO to the USFS for a core drilling program at Copper Camp. Approval of the POO is expected in 2011. The timing of drilling will be dependent on the Company’s ability to secure adequate funding. An additional 13 unpatented lode claims were also staked increasing the property area to about 440 acres. No work was completed on the Copper Camp prospect in 2010.
WISCONSIN-TEDDY PROSPECT
Summary
The Wisconsin-Teddy is an
exploration project without known ore reserves. The project area lies north of
the New Jersey mine and is accessed by a local frontage road. Electrical power
is available adjacent to the site. The Company's claims cover 83 acres. The
claims are unpatented and are on public land administered by the BLM. The
project is a base metal exploration project in the Prichard Formation. Several
tunnels with an aggregate length of 2,000 feet were driven on the property prior
to 1930. This development was related to two veins systems: a copper-gold vein
and a zinc-lead-silver vein. Work completed by the Company included the opening
of the Teddy underground workings, sampling on the surface and underground, and
geologic mapping. Two exploration holes were drilled in the summer of 2003 and
anomalous base metal mineralization was found. No exploration work has been
completed since 2003 and there are no plans for additional exploration work in
2011.
SILVER BUTTON/ROUGHWATER PROSPECT
Summary
The Silver Button is an
exploration project without known ore reserves, covers an area of 20 acres, and
is located in the Clark Fork mining district of northern Idaho. Clark Fork is
about 96 kilometers north of Kellogg, Idaho. The property was staked by the
Company in 2004 and is located in the Lightning Creek drainage. Float collected
from over a 100 m length of a vein subcrop on a talus slope contained silver
minerals as identified by microscopic and chemical analyses. Access to the site
is via foot trail and no electrical power is available at the site. Only
preliminary field sampling and claim staking have taken place at the prospect. A
POO for a helicopter-mobilized core-drilling program has been submitted to the
USFS. Modifications to the POO were made after meeting with the USFS in June of
2005. A site visit was made with USFS personnel in 2006, but the USFS has yet to
indicate if or when the POO will be approved. Exploration drilling will be
dependent on the Company’s ability to raise sufficient funds and the receipt of
a permit from the USFS. As of December 31, 2010, the Company had an investment
cost of $25,500 associated with this property.
ITEM 3.
LEGAL PROCEEDINGS
The Company is currently a plaintiff along with Shoshone County, Idaho, and George E. Stephenson in a complaint against the USA, Secretary of the Department of Agriculture, Chief of the Forest Service, etc., for Declaratory Judgment and Quiet Title regarding a public right-of-way for the East Fork of Eagle Creek Road near Murray, Idaho. The complaint was filed on October 5, 2009 in the United States District Court, District of Idaho. The plaintiffs are bringing the action to adjudicate/declare under the Quiet Title Act, and under the Declaratory Judgment Act that the East Fork Eagle Creek Road is a public road as it crosses the lands owned by the USA in accordance with R.S. 2477. A settlement conference was held with the defendants in May of 2010, but no settlement was reached. The current litigation plan is for the plaintiffs to file a Motion for Partial Summary Judgment.
ITEM 4.
(REMOVED AND RESERVED)
PART II
ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The Company's
Common Stock currently trades on the OTCQB tier of the OTC Market under the
symbol "NJMC". The following table sets forth the range of high and low bid
prices as reported by the OTCQB for the periods indicated. These quotations
represent inter-dealer prices, without retail mark-up, markdown or commission
and may not represent actual transactions.
| Year Ending December 31, 2010 | High Bid | Low Bid |
| First Quarter | $0.29 | $0.19 |
| Second Quarter | $0.28 | $0.20 |
| Third Quarter | $0.26 | $0.18 |
| Fourth Quarter | $0.35 | $0.18 |
| Year Ending December 31, 2009 | High Bid | Low Bid |
| First Quarter | $0. 37 | $0. 18 |
| Second Quarter | $0. 35 | $0. 18 |
| Third Quarter | $0. 32 | $0. 19 |
| Fourth Quarter | $0. 34 | $0. 19 |
14
Shareholders
As of March 10, 2011
there were approximately 1,200 shareholders of record of the Company's Common
Stock.
Dividend Policy
The Company has not
declared or paid cash dividends or made distributions in the past and the
Company does not anticipate that it will pay cash dividends or make
distributions in the foreseeable future. The Company currently intends to retain
and reinvest future earnings, if any, to finance its operations.
Transfer Agent
The transfer agent for
the Company's Common Stock is Columbia Stock Transfer Company, 601 E. Seltice
Way Suite 202, Post Falls, Idaho 83854.
Securities Authorized for Issuance Under Equity
Compensation Plans
The Company has not adopted an equity
compensation plan for the award of options, warrants or rights to employees or
non-employees. However, in April of 2007, the Board of Directors approved a
compensation plan for our President, Fred W. Brackebusch, that states that any
time over 130 hours per month is compensated with restricted common stock at a
rate of $150 per hour. In January of 2009, the Board of Directors approved a
compensation plan for Vice President Grant Brackebusch that awarded him with
restricted common stock for an average of 84.5 hours per month at a rate of $100
per hour. The number of shares was calculated quarterly using the average bid
price for the quarter as quoted on the OTCQB. Additionally, in 2009, both Fred
W. Brackebusch and Grant Brackebusch were compensated with shares in lieu of
cash for some of their base salaries as well to conserve limited cash. During
the year ended December 31, 2009 the Company issued 651,320 shares of its
restricted common stock valued at $195,398 to Fred Brackebusch for management
services. In 2009 the Company issued 338,000 shares of its restricted common
stock valued at $101,400 to Grant Brackebusch for management services. In 2010,
the restricted stock compensation plans for both Fred W. Brackebusch and Grant
A. Brackebusch were discontinued.
Also, the Company has in the past issued 2,000 shares to each employee, excluding management and directors, three times per year after one year of service has been achieved.
Equity Compensation Plan Information
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| (a) | (b) | (c) | |
| Equity compensation plans approved by security holders | 0 | 0 | 0 |
| Equity compensation plans not approved by security holders | 0 | 0 | 0 |
| Total | 0 | 0 | 0 |
Occasionally, we pay for goods and services with restricted common stock. Our policy is to determine the fair value of the goods or services, and then issue the number of corresponding shares using the bid price for our common stock as quoted by the OTC Market.
Recent Sales of Unregistered Securities
For the year ending December 31, 2010, the Company issued 305,600 shares
of restricted common stock for management and director’s fees, equipment,
services, exploration, and mining lease payments. A value of $65,950 (for an
average value of $0.22 per share) was assigned to these fees, services, and
equipment. See the statement of shareholders' equity (Item 8 Financial
Statements) for a detailed list. The transactions were strictly limited to
persons in the United States who met certain minimum financial (accredited
investors) or sophistication requirements. In management’s opinion, the
securities were issued pursuant to exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.
ITEM 6.
SELECTED FINANCIAL DATA
Not required for smaller reporting companies.
15
ITEM 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
When we use the terms "New Jersey Mining Company," the "Company," "we," "us," or "our," we are referring to New Jersey Mining Company (the "Company") and its subsidiaries, unless the context otherwise requires.
Cautionary Statement about Forward-Looking Statements
This Report on Form 10-K includes certain statements that may be deemed to be "forward-looking statements." All statements, other than statements of historical facts, included in this Form 10-K that address activities, events or developments that our management expects, believes or anticipates will or may occur in the future are forward-looking statements. Such forward-looking statements include discussion of such matters as:
-
The amount and nature of future capital, development and exploration expenditures;
-
The timing of exploration activities; and
-
Business strategies and development of our business plan.
Forward-looking statements also typically include words such as "anticipate," "estimate," "expect," "potential," "could" or similar words suggesting future outcomes. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, including such factors as the volatility and level of metal prices, currency exchange rate fluctuations, uncertainties in cash flow, expected acquisition benefits, exploration mining and operating risks, competition, litigation, environmental matters, the potential impact of government regulations, and other matters related to the mining industry, many of which are beyond our control. Readers are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those expressed or implied in the forward-looking statements.
The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.
Plan of Operation
The Company modified
its strategy in 2010. The former strategy was to conduct exploration for gold,
silver and base metal deposits in the greater Coeur d’Alene Mining District of
northern Idaho while concurrently conducting mining and mineral processing
operations on ore reserves it has located on its exploration properties. The new
strategy now de-emphasizes the generation of cash by mining and milling and
emphasizes the exploration of its properties in order to increase the amount of
reserves before making a production decision. The new financial strategy
involves forming joint ventures with partners who contribute cash to earn their
interest. The strategy includes finding and developing ore reserves of
significant quality and quantity to justify investment in mining and mineral
processing facilities. The Company’s primarily focus is on gold with silver and
base metals of secondary emphasis.
The Company has two properties at which most exploration is being conducted; the Golden Chest and the Toboggan Project. Other exploration properties include the Niagara, the Silver Strand, the Coleman, and the Giant Ledge.
Exploration activities at the Golden Chest during 2010 were not substantial. One exploration hole from surface was drilled; however, and a very high grade gold intercept was made. Efforts were made underground to find the vein, which were successful in locating a new vein in the hangingwall of the Idaho fault. The underground efforts had to be suspended due to poor ground conditions before access was made to the actual intercept. In December 2010, the Company was successful in finding a partner to greatly increase the exploration efforts at the Golden Chest. A venture agreement was signed with Marathon Gold USA Corp. (MUSA) on December 15, 2010. The main points of the venture agreement are purchasing the mine from the underlying owner and setting out the terms of the venture. A new limited liability company, called Golden Chest LLC (GC), was created to operate the project. NJMC has contributed to GC certain mining claims it owned, all geological data and certain mining equipment. Also in consideration for its interest in GC, NJMC has terminated, for the benefit of GC, two operating leases it held on the mine from Metaline Contact Mines, J.W. Beasley Interests, LLC, and Prichard Creek Resource Partners, LLC. MUSA has contributed $1,000,000 cash and has agreed to contribute i) $500,000 by March 31, 2011, ii) $500,000 by June 30, 2011, iii) $1,000,000 by September 30, 2011 and vi) $1,000,000 by November 30, 2011 for a total cash contribution of $4 million. GC has purchased the mine for $3,750,000 from the above mentioned leasors. For the mine GC paid $500,000 in cash on closing the transaction and has agreed to pay to $500,000 each year for the next six years and a final payment of $250,000 on the seventh anniversary. The previous leasors have a first mortgage on the mine as security for the future payments owing. If MUSA does not make all of the $4M payments to GC, its 50% ownership interest will be reduced. MUSA has the right to contribute an additional $3.5 million by November 30, 2012 to take its ownership interest to 60% of GC. MUSA also has the option to accelerate any of these contributions. A work program was prepared to conduct surface and underground drilling commencing early in 2011.
The Toboggan Project is a group of prospects in the Murray, Idaho District that contain gold and silver telluride minerals. The Toboggan Project is being explored by Newmont North America Exploration Limited under a joint venture agreement. Newmont is conducting exploration in a 38 square mile area centered on the prospects that the Company has staked previously and on new claims staked by Newmont. During 2010 Newmont completed a drilling program, conducted permitting activities and did geological mapping. Under the venture agreement, Newmont has until March 20, 2011 to complete their earn-in expenditures of $2 million. The Company conducted core drilling operations at the Toboggan Project for Newmont under a service agreement.
16
The Niagara copper-silver deposit, also located in the Murray, Idaho area, in the Revett formation was drilled in the 1970’s, and the Company drilled five holes since which expanded the resource. Results of the recent drilling also indicate that gold would be a significant byproduct. Preliminary open pit mining studies have been completed. The Company will continue in-fill drilling on the known resource and is planning to drill to intercept a deeper stratabound target in the Revett formation.
In May 2010 the Company mobilized a crew to the Silver Strand mine in preparation for production from a reserve block above the lowest adit level. Preparations were completed and a test shipment of ore was treated at the New Jersey mill. Flotation recovery was acceptable but silver recovery in the concentrate leach plant was not adequate. The crews were remobilized to the Golden Chest mine in July 2010 to explore the high grade intercept made there and the Silver Strand mine remained idle the rest of the year. The metallurgical problem was later solved.
At the Coleman underground mine, an exploration raise was commenced prior to mobilizing the mining crew to the Silver Strand. Tonnes milled from the Coleman raise were 366 tonnes grading 2.68 gpt gold. Future plans are to conduct further drilling to locate higher grade reserves.
The New Jersey mineral processing plant processed 620 tonnes during 2010. A letter of intent to form a joint venture with United Mine Services, Inc. was signed in September 2010 and a definitive venture agreement was reached in January 2011. The plant will be expanded from a processing rate of 4 tonnes/hr to 15 tonnes/hr during 2011. UMS will pay the expansion cost estimated to be $2.3 million. After completion of the expansion, the Company will own 2/3 of the venture and UMS will own 1/3. The Company is the operator of the venture. UMS will have a minimum quota of ore of 7,000 tonnes per month and the Company will have 3,000 tonnes per month. Each party will pay its processing costs and the Company will charge a management fee of $2.50/tonne.
Changes in Financial Condition
The Company
maintains an adequate cash balance by increasing or decreasing its exploration
expenditures as limited by availability of cash from operations or from
financing activities. The cash balance at the end of the year was $357,317, and
Figure 1 shows the corresponding balances for previous accounting periods.
The cash balance increased during the year, starting from $34,087, due to financing activities.
Results of Operations
Income Earned
during the Development Stage (Revenue) for 2010 was $204,737 as compared to
$450,883 for 2009. Revenue was lower in 2010 due to decreased sales of gold.
Figure 2 shows a net loss for 2010 of $540,828 compared to $850,786 for 2009.
The net loss for 2010 was less than 2009 because of lower management costs.
17
Gold production was 26 ounces in 2010 as compared to 230 ounces for 2009. No gold production is expected for 2011 because the mill is shutdown due to construction and only exploration activities are planned for the Golden Chest mine.
Preliminary plans at the Golden Chest mine include only exploration in 2011 but in 2012, ramp access may be extended to the Idaho vein reserves. When the Idaho vein ramp development is completed there will be more than 200,000 tonnes available for production from currently-existing reserves.
No production is planned at the Silver Strand mine in 2011 because plans are to sell the mine or engage a joint venture partner. The mine is ready for production on a seasonal basis.
About $2.3 million in capital expenditures are planned at the New Jersey mineral processing plant to increase the processing rate to 15 tonnes per hour. Expansion costs are paid by the joint venture partner, United Mine Services.
The amount of money to be spent on exploration at the Company’s mines and prospects depends primarily on contributions of our joint venture partners, particularly at the Golden Chest and Toboggan Project. Some exploration may be done at the properties, including Niagara, Coleman and Giant Ledge, if funds are available.
The Company provides surface drilling services at the Golden Chest and receives payment from Golden Chest LLC from funds provided by Marathon Gold. The Company also receives a management fee as Manager of the venture. The Company receives payment for engineering services from United Mine Services for the mill expansion project. No additional financing activities are necessary in 2011 unless exploration plans are expanded.
Changes in Direct Production Costs
Direct
production costs, decreased from 2009 to 2010 due to decreased production in
2010 as more of the available funds were directed towards exploration.
Changes in management costs
Management
costs decreased from 2009 to 2010 because of the elimination of the stock
compensation.
Changes in Exploration costs
Exploration costs increased from 2009 to 2010 as available funds were
shifted from production to exploration.
Changes in General and Administrative Costs
General and administrative costs increased from 2009 to 2010 as
activities were resumed due to funding availability, Activities were curtailed
to a certain degree in 2009 due to a lack of discretionary funding.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
18
ITEM 8.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Board of Directors
New Jersey Mining Company
We have audited the accompanying balance sheets of New Jersey Mining Company (A Development Stage Company) (“the Company”) as of December 31, 2010 and 2009, and the related statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on our audits, the financial statements referred to above present fairly, in all material respects, the financial position of New Jersey Mining Company as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ DeCoria, Maichel & Teague P.S.
DeCoria, Maichel & Teague P.S.
Spokane, Washington
March 28, 2011
19
New Jersey Mining Company
(A Development Stage
Company)
Table of Contents
20
New Jersey Mining Company
(A Development Stage
Company)
Balance Sheets
December 31, 2010 and 2009
| ASSETS | ||||||
| 2010 | 2009 | |||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 357,317 | $ | 34,087 | ||
| Investment in marketable equity
security at market (cost-$3,868) |
19,344 | 21,665 | ||||
| Interest receivable | 276 | 309 | ||||
| Miscellaneous receivable | 1,676 | 919 | ||||
| Engineering services receivable | 9,848 | |||||
| Joint venture receivable | 2,065 | |||||
| Prepaid claim fees | 13,440 | 18,573 | ||||
| Inventory | 16,381 | 1,833 | ||||
| Total current assets | 420,347 | 77,386 | ||||
| Property, plant and equipment, net of accumulated depreciation | 1,323,330 | 1,353,369 | ||||
| Mineral properties, net of accumulated amortization | 871,374 | 1,407,959 | ||||
| Investment in Golden Chest LLC | 553,205 | |||||
| Reclamation bonds | 121,133 | 121,088 | ||||
| Total assets | $ | 3,289,389 | $ | 2,959,802 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 42,958 | $ | 62,858 | ||
| Note and interest payable, related party | 72,107 | |||||
| Accrued payroll and related payroll expenses | 15,986 | 7,160 | ||||
| Deposit received on sale of mineral property | 50,000 | |||||
| Obligations under capital lease, current | 13,246 | 9,894 | ||||
| Notes payable, current | 54,661 | 134,689 | ||||
| Total current liabilities | 126,851 | 336,708 | ||||
| Asset retirement obligation | 29,385 | 25,913 | ||||
| Obligations under capital lease-non-current | 1,403 | 10,398 | ||||
| Notes payable, non-current | 64,720 | 56,650 | ||||
| Total non-current liabilities | 95,508 | 92,961 | ||||
| Total liabilities | 222,359 | 429,669 | ||||
| Commitments and contingencies (Note 12) | ||||||
| Stockholders’ equity: | ||||||
| Preferred stock, no par value,
1,000,000 shares authorized; no shares issued or outstanding Common stock, no par value, 50,000,000 shares authorized; 2010-45,017,862 and 2009-38,685,232 shares issued and outstanding |
10,365,429 | 9,285,383 | ||||
| Deficit accumulated during the development stage | (7,313,874 | ) | (6,773,046 | ) | ||
| Accumulated other comprehensive income: | ||||||
| Unrealized gain on marketable equity security | 15,475 | 17,796 | ||||
| Total stockholders’ equity | 3,067,030 | 2,530,133 | ||||
| Total liabilities and stockholders’ equity | $ | 3,289,389 | $ | 2,959,802 | ||
The accompanying notes are an integral part of these financial statements.
21
New Jersey Mining Company
(A Development Stage
Company)
Statements of Operations and Comprehensive Income (Loss)
For the Years Ended December 31, 2010 and 2009,
And from Inception (July 18, 1996) through December 31, 2010
| From Inception | |||||||||
| (July 18, 1996) | |||||||||
| December 31, | Through | ||||||||
| December 31, 2010 | |||||||||
| 2010 | 2009 | (Unaudited) | |||||||
| Income earned during the development stage: | |||||||||
| Sales of gold | $ | 11,410 | $ | 275,997 | $ | 437,122 | |||
| Sales of concentrate | 601,168 | ||||||||
| Drilling and exploration contract income | 161,305 | 174,886 | 359,916 | ||||||
| Engineering services income | 32,022 | 32,022 | |||||||
| 204,737 | 450,883 | 1,430,228 | |||||||
| Costs and expenses: | |||||||||
| Direct production costs | 51,770 | 317,664 | 1,318,971 | ||||||
| Drilling and exploration contract expense | 118,381 | 88,686 | 207,067 | ||||||
| Engineering services expense | 13,090 | 13,090 | |||||||
| Management | 133,596 | 416,048 | 1,829,627 | ||||||
| Exploration | 158,223 | 80,733 | 2,408,231 | ||||||
| Gain on sale of mineral property | (90,000 | ) | |||||||
| Gain on default of mineral property sale | (50,000 | ) | (320,000 | ) | |||||
| Net gain on sale of equipment | (35,098 | ) | (35,098 | ) | |||||
| Depreciation and amortization | 59,687 | 125,465 | 729,780 | ||||||
| General and administrative expenses | 302,165 | 265,186 | 2,693,724 | ||||||
| Total operating expenses | 751,814 | 1,293,782 | 8,755,392 | ||||||
| Other (income) expense: | |||||||||
| Timber sales | (54,699 | ) | |||||||
| Timber expense | 14,554 | ||||||||
| Royalties and other income | (15,745 | ) | (373 | ) | (87,821 | ) | |||
| Royalties expense | 9,816 | 44,089 | |||||||
| Gain on sale of marketable equity security | (22,160 | ) | (92,269 | ) | |||||
| Interest income | (887 | ) | (651 | ) | (47,981 | ) | |||
| Interest expense | 10,383 | 21,255 | 91,887 | ||||||
| Write-off of goodwill | 30,950 | ||||||||
| Write-off of investment | 90,000 | ||||||||
| Total other (income) expense | (6,249 | ) | 7,887 | (11,290 | ) | ||||
| Net loss | 540,828 | 850,786 | 7,313,874 | ||||||
| Other comprehensive (income) loss: | |||||||||
| Unrealized (gain) loss on marketable equity security | 2,321 | (7,999 | ) | (15,475 | ) | ||||
| Comprehensive loss | $ | 543,149 | $ | 842,787 | $ | 7,298,399 | |||
| Net loss per common share-basic | $ | 0.01 | $ | 0.02 | $ | 0.34 | |||
| Weighted average common shares outstanding-basic | 42,434,985 | 37,745,957 | 21,763,458 | ||||||
The accompanying notes are an integral part of these
financial statements.
22
New Jersey Mining Company
(A Development Stage Company)
Statement of Changes in
Stockholders' Equity
For the Years Ended
December 31, 2010, and 2009 (audited), and for the
Period
From Inception (July 18, 1996) Through December
31, 2010 (unaudited)
| Accum. Other | Total | |||||||||||||||||
| Common Stock | Accumulated | Comprehensive | Treasury | Stockholders' | ||||||||||||||
| Shares | Amount | Deficit | Income | Stock | Equity | |||||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Assets and liabilities of New Jersey Joint Venture | 10,000,000 | $ | 207,968 | $ | $ | $ | $ | 207,968 | ||||||||||
| Acquisition of Plainview Mining Company | 1,487,748 | 148,000 | 148,000 | |||||||||||||||
| Cash from sales | 228,816 | 110,115 | 110,115 | |||||||||||||||
| Services | 14,000 | |||||||||||||||||
| Net loss | (44,174 | ) | (44,174 | ) | ||||||||||||||
| Balance, December 31, 1997 | 11,730,564 | 466,083 | (44,174 | ) | 421,909 | |||||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Acquisition of Plainview Mining Company | 1,512,252 | 152,000 | 152,000 | |||||||||||||||
| Cash from sales | 117,218 | 29,753 | 29,753 | |||||||||||||||
| Services | 18,000 | |||||||||||||||||
| Treasury stock acquired with Plainview acquisition | (136,300 | ) | (136,300 | ) | ||||||||||||||
| Net loss | (30,705 | ) | (30,705 | ) | ||||||||||||||
| Balance, December 31, 1998 | 13,378,034 | 647,836 | (74,879 | ) | (136,300 | ) | 436,657 | |||||||||||
| Issuance of common stock for services | 79,300 | - | ||||||||||||||||
| Net loss | (23,738 | ) | (23,738 | ) | ||||||||||||||
| Balance, December 31, 1999 | 13,457,334 | 647,836 | (98,617 | ) | (136,300 | ) | 412,919 | |||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Silver Strand property | 50,000 | 68,750 | 68,750 | |||||||||||||||
| Services | 62,100 | 4,313 | 4,313 | |||||||||||||||
| Net loss | (20,492 | ) | (20,492 | ) | ||||||||||||||
| Balance, December 31, 2000 | 13,569,434 | 720,899 | (119,109 | ) | (136,300 | ) | 465,490 | |||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Grenfel lease | 1,000,000 | 100,000 | 100,000 | |||||||||||||||
| Lost Eagle property | 50,000 | 5,000 | 5,000 | |||||||||||||||
| Roughwater property | 255,000 | 25,500 | 25,500 | |||||||||||||||
| Services | 68,400 | 6,840 | 6,840 | |||||||||||||||
| Net loss | (6,448 | ) | (6,448 | ) | ||||||||||||||
| Balance, December 31, 2001 | 14,942,834 | 858,239 | (125,557 | ) | (136,300 | ) | 596,382 | |||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Cash | 1,700,000 | 255,000 | 255,000 | |||||||||||||||
| Services | 9,835 | 1,475 | 1,475 | |||||||||||||||
| Directors’ fees | 15,000 | 2,250 | 2,250 | |||||||||||||||
| Acquisition of Gold Run Gulch Mining Company | 1,916,250 | 273,954 | 273,954 | |||||||||||||||
| Net loss, as previously reported | (51,307 | ) | (51,307 | ) | ||||||||||||||
| Balance, December 31, 2002, as previously reported | 18,583,919 | 1,390,918 | (176,864 | ) | (136,300 | ) | 1,077,754 | |||||||||||
| Change in accounting for exploration costs | (9,883 | ) | (9,883 | ) | ||||||||||||||
| Correction of error in accounting for stock issuance costs | (25,500 | ) | 25,500 | |||||||||||||||
| Balance, December 31, 2002, restated | 18,583,919 | 1,365,418 | (161,247 | ) | (136,300 | ) | 1,067,871 | |||||||||||
The accompanying notes are an integral part of these financial statements.
23
New Jersey Mining Company
(A Development Stage Company)
Statement of Changes in
Stockholders' Equity, continued:
For the Years Ended December 31, 2010, and 2009
(audited), and for the Period
From Inception (July 18, 1996) Through December
31, 2010 (unaudited)
| Accum. Other | Total | |||||||||||||||||
| Common Stock | Accumulated | Comprehensive | Treasury | Stockholders' | ||||||||||||||
| Shares | Amount | Deficit | Income | Stock | Equity | |||||||||||||
| Balance, December 31, 2002 | 18,583,919 | 1,365,418 | (161,247 | ) | (136,300 | ) | 1,067,871 | |||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Exercise of stock purchase warrants | 810,000 | 200,750 | 200,750 | |||||||||||||||
| Cash, net of issuance costs | 795,000 | 318,000 | 318,000 | |||||||||||||||
| Management and directors’ fees | 381,200 | 144,326 | 144,326 | |||||||||||||||
| Equipment | 5,000 | 3,000 | 3,000 | |||||||||||||||
| Services | 21,915 | 7,262 | 7,262 | |||||||||||||||
| Exploration lease | 20,000 | 8,000 | 8,000 | |||||||||||||||
| Treasury stock cancelled | (1,947,144 | ) | (136,300 | ) | 136,300 | |||||||||||||
| Net loss | (379,274 | ) | (379,274 | ) | ||||||||||||||
| Balance, December 31, 2003 | 18,669,890 | 1,910,456 | (540,521 | ) | 0 | 1,369,935 | ||||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Exercise of stock purchase warrants | 1,437,500 | 398,750 | 398,750 | |||||||||||||||
| Cash | 1,184,550 | 511,440 | 511,440 | |||||||||||||||
| Management and directors’ fees | 153,460 | 102,273 | 102,273 | |||||||||||||||
| Equipment | 28,650 | 16,476 | 16,476 | |||||||||||||||
| Services | 26,750 | 14,550 | 14,550 | |||||||||||||||
| Exploration lease | 20,000 | 12,000 | 12,000 | |||||||||||||||
| Net loss | (922,555 | ) | (922,555 | ) | ||||||||||||||
| Balance, December 31, 2004 | 21,520,800 | 2,965,945 | (1,463,076 | ) | 0 | 1,502,869 | ||||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Cash | 309,100 | 125,000 | 125,000 | |||||||||||||||
| Exercise of stock purchase warrants | 195,250 | 78,100 | 78,100 | |||||||||||||||
| Management and directors’ fees | 334,275 | 132,725 | 132,725 | |||||||||||||||
| Services | 82,170 | 37,826 | 37,826 | |||||||||||||||
| Exploration and lease | 149,400 | 74,321 | 74,321 | |||||||||||||||
| Equipment | 11,500 | 4,700 | 4,700 | |||||||||||||||
| Value of shares issued in prior years | 24,050 | 24,050 | ||||||||||||||||
| Net loss | (590,485 | ) | (590,485 | ) | ||||||||||||||
| Balance, December 31, 2005 | 22,602,495 | 3,442,667 | (2,053,561 | ) | 0 | 1,389,106 | ||||||||||||
| Issuance of common stock for: | ||||||||||||||||||
| Cash | 4,521,250 | 1,368,500 | 1,368,500 | |||||||||||||||
| Management and directors’ fees | 236,480 | 127,063 | 127,063 | |||||||||||||||
| Services | 162,860 | 56,137 | 56,137 | |||||||||||||||
| Exploration | 10,000 | 5,750 | 5,750 | |||||||||||||||
| Lease | 30,000 | 15,000 | 15,000 | |||||||||||||||
| Equipment | 23,400 | 12,200 | 12,200 | |||||||||||||||
| Unrealized gain in marketable equity security | 911,250 | 911,250 | ||||||||||||||||
| Net loss | (991,602 | ) | (991,602 | ) | ||||||||||||||
| Balance, December 31, 2006 | 27,586,485 | 5,027,317 | (3,045,163 | ) | 911,250 | 0 | 2,893,404 | |||||||||||
The accompanying notes are an integral part of these financial statements.
24
New Jersey Mining Company
(A Development Stage Company)
Statement of Changes in
Stockholders' Equity, continued:
For the Years Ended December 31, 2010, and 2009
(audited), and for the Period
From Inception (July 18, 1996) Through December
31, 2010 (unaudited)
| Accum. Other | Total | ||||||||||||||
| Common Stock | Accumulated | Comprehensive | Stockholders' | ||||||||||||
| Shares | Amount | Deficit | Income | Equity | |||||||||||
| Balance, December 31, 2006 | 27,586,485 | $ | 5,027,317 | $ | (3,045,163 | ) | $ | 911,250 | $ | 2,893,404 | |||||
| Issuance of common stock for: | |||||||||||||||
| Cash | 4,014,761 | 1,533,319 | 1,533,319 | ||||||||||||
| Exercise of warrants | 200,000 | 120,000 | 120,000 | ||||||||||||
| Management and directors fees | 274,386 | 142,500 | 142,500 | ||||||||||||
| Services | 52,104 | 27,157 | 27,157 | ||||||||||||
| Exploration | 52,200 | 32,560 | 32,560 | ||||||||||||
| Mineral property agreement | 60,000 | 30,000 | 30,000 | ||||||||||||
| Property, plant and equipment | 20,756 | 10,239 | 10,239 | ||||||||||||
| Accounts payable | 30,500 | 12,205 | 12,205 | ||||||||||||
| Unrealized gain (loss) in marketable equity security | (525,909 | ) | (525,909 | ) | |||||||||||
| Net loss | (1,453,268 | ) | (1,453,268 | ) | |||||||||||
| Balance, December 31, 2007 | 32,291,192 | 6,935,297 | (4,498,431 | ) | 385,341 | 2,822,207 | |||||||||
| Issuance of common stock for: | |||||||||||||||
| Cash | 2,400 | 950 | 950 | ||||||||||||
| Exercise of warrants | 4,350,000 | 1,740,000 | 1,740,000 | ||||||||||||
| Management and directors fees | 318,700 | 108,000 | 108,000 | ||||||||||||
| Services | 74,000 | 32,000 | 32,000 | ||||||||||||
| Exploration | 35,100 | 15,390 | 15,390 | ||||||||||||
| Mineral property agreement | 75,000 | 21,000 | 21,000 | ||||||||||||
| Property, plant and equipment | 14,000 | 5,600 | 5,600 | ||||||||||||
| Unrealized gain (loss) in marketable equity security | (375,544 | ) | (375,544 | ) | |||||||||||
| Net loss | (1,423,829 | ) | (1,423,829 | ) | |||||||||||
| Balance December 31, 2008 | 37,160,392 | 8,858,237 | (5,922,260 | ) | 9,797 | 2,945,774 | |||||||||
| Issuance of common stock for: | |||||||||||||||
| Cash | 138,000 | 34,500 | 34,500 | ||||||||||||
| Management and directors fees | 1,139,320 | 334,298 | 334,298 | ||||||||||||
| Services | 125,520 | 29,098 | 29,098 | ||||||||||||
| Exploration | 50,000 | 11,250 | 11,250 | ||||||||||||
| Mineral property agreement | 72,000 | 18,000 | 18,000 | ||||||||||||
| Unrealized gain (loss) in marketable equity security | 7,999 | 7,999 | |||||||||||||
| Net loss | (850,786 | ) | (850,786 | ) | |||||||||||
| Balance, December 31, 2009 | 38,685,232 | $ | 9,285,383 | $ | (6,773,046 | ) | $ | 17,796 | $ | 2,530,133 | |||||
The accompanying notes are an integral part of these financial statements.
25
New Jersey Mining Company
(A Development Stage Company)
Statement of Changes in
Stockholders' Equity, continued:
For the Years Ended December 31, 2010, and 2009
(audited), and for the Period
From
Inception (July 18, 1996) Through
December 31, 2010 (unaudited)
| Accum. Other | Total | ||||||||||||||
| Common Stock | Accumulated | Comprehensive | Stockholders' | ||||||||||||
| Shares | Amount | Deficit | Income | Equity | |||||||||||
| Balance December 31, 2009 | 38,685,232 | $ | 9,285,383 | $ | (6,773,046 | ) | $ | 17,796 | $ | 2,530,133 | |||||
| Issuance of common stock for: | |||||||||||||||
| Cash | 5,820,530 | 980,160 | 980,160 | ||||||||||||
| Exercise of warrants | 206,500 | 33,936 | 33,936 | ||||||||||||
| Management and directors fees | 150,000 | 30,000 | 30,000 | ||||||||||||
| Services | 81,000 | 17,425 | 17,425 | ||||||||||||
| Mineral property agreement | 72,000 | 18,000 | 18,000 | ||||||||||||
| Accounts payable | 2,600 | 525 | 525 | ||||||||||||
| Unrealized gain (loss) in marketable equity security | (2,321 | ) | (2,321 | ) | |||||||||||
| Net loss | (540,828 | ) | (540,828 | ) | |||||||||||
| Balance December 31, 2010 | 45,017,862 | $ | 10,365,429 | $ | (7,313,874 | ) | $ | 15,475 | $ | 3,067,030 | |||||
The accompanying notes are an integral part of these financial statements.
26
New Jersey Mining Company
(A Development Stage
Company)
Statements of Cash Flows
For the Years Ended
December 31, 2010 and 2009,
And from Inception (July 18, 1996) through December 31, 2010
| From Inception | |||||||||
| Years Ended | (July 18, 1996) | ||||||||
| December 31, | through | ||||||||
| December 31, 2010 | |||||||||
| 2010 | 2009 | (Unaudited) | |||||||
| Cash flows from operating activities: | |||||||||
| Net loss | $ | (540,828 | ) | $ | (850,786 | ) | $ | (7,313,874 | ) |
| Adjustments to reconcile net loss to net cash | |||||||||
| Used by operating activities: | |||||||||
| Depreciation and amortization | 59,687 | 125,465 | 729,780 | ||||||
| (Gain) loss on sale of equipment | (35,098 | ) | (23,826 | ) | |||||
| Write-off of goodwill and investment | 120,950 | ||||||||
| Gain on sale of mineral property | (50,000 | ) | (410,000 | ) | |||||
| Gain on sale of marketable equity security | (22,160 | ) | (92,269 | ) | |||||
| Accretion of asset retirement obligation | 3,472 | 443 | 4,615 | ||||||
| Common stock issued for: | |||||||||
| Management and directors’ fees | 30,000 | 334,298 | 1,139,335 | ||||||
| Services and other | 17,426 | 29,098 | 239,834 | ||||||
| Exploration | 11,250 | 95,521 | |||||||
| Mineral property agreement | 15,000 | ||||||||
| Change in: | |||||||||
| Prepaid expense | 572 | ||||||||
| Prepaid claim fees | 5,133 | (18,573 | ) | (13,440 | ) | ||||
| Inventory | (14,549 | ) | 97,259 | (16,382 | ) | ||||
| Miscellaneous receivable | (757 | ) | 4,597 | (1,676 | ) | ||||
| Interest receivable | 34 | 15 | (275 | ) | |||||
| Engineering services receivable | (9,848 | ) | (9,848 | ) | |||||
| Joint venture receivable | (2,065 | ) | (2,065 | ) | |||||
| Other assets | (778 | ) | |||||||
| Accounts payable | (19,376 | ) | 18,181 | 52,720 | |||||
| Accrued payroll and related payroll expense | 8,827 | (38,546 | ) | 15,986 | |||||
| Accrued reclamation costs | (20,743 | ) | (1,443 | ) | |||||
| Net cash used by operating activities | (547,942 | ) | (329,630 | ) | (5,471,835 | ) | |||
| Cash flows from investing activities: | |||||||||
| Purchases of property, plant and equipment | (21,043 | ) | (4,391 | ) | (1,105,291 | ) | |||
| Purchase of mineral property | (3,000 | ) | (3,000 | ) | (23,904 | ) | |||
| Proceeds from sale of mineral property | 120,000 | ||||||||
| Deposit received on sale of mineral property | 50,000 | 320,000 | |||||||
| Proceeds from sale of equipment | 36,498 | 36,498 | |||||||
| Redemption (purchase) of reclamation bonds | (45 | ) | 2,432 | (121,133 | ) | ||||
| Purchase of marketable equity security | (7,500 | ) | |||||||
| Proceeds from sales of marketable equity securities | 24,823 | 95,901 | |||||||
| Cash of acquired companies | 38,269 | ||||||||
| Deferral of development costs | (759,209 | ) | |||||||
| Net cash provided (used) by investing activities | 12,410 | 69,864 | (1,406,369 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Exercise of stock purchase warrants | 33,936 | 2,571,536 | |||||||
| Sales of common stock, net of issuance costs | 980,160 | 34,500 | 5,241,236 | ||||||
| Principal payments on capital lease | (11,268 | ) | (26,665 | ) | (194,765 | ) | |||
| Principal payments on notes payable | (71,959 | ) | (107,343 | ) | (382,486 | ) | |||
| Note and interest payable, related party, net | (72,107 | ) | 72,107 | ||||||
| Net cash provided (used) by financing activities | 858,762 | (27,401 | ) | 7,235,521 | |||||
| Net change in cash and cash equivalents | 323,230 | (287,167 | ) | 357,317 | |||||
| Cash and cash equivalents, beginning of period | 34,087 | 321,254 | 0 | ||||||
| Cash and cash equivalents, end of period | $ | 357,317 | $ | 34,087 | $ | 357,317 | |||
| Supplemental disclosure of cash flow information | |||||||||
| Interest paid in cash, net of amount capitalized | $ | 10,383 | $ | 18,598 | $ | 79,867 | |||
| Non-cash investing and financing activities: | |||||||||
| Common stock issued for: | |||||||||
| Property, plant and equipment | $ | 50,365 | |||||||
| Mineral properties agreement | $ | 18,000 | $ | 18,000 | $ | 351,600 | |||
| Payment of accounts payable | $ | 525 | $ | 12,730 | |||||
| Acquisitions of companies, excluding cash | $ | 743,653 | |||||||
| Capital lease obligation incurred for equipment acquired | $ | 5,625 | $ | 184,213 | |||||
| Notes payable for property and equipment acquired | $ | 482,634 | |||||||
| Mineral property transferred to Golden Chest LLC | $ | 553,205 | $ | 553,205 | |||||
The accompanying notes are an integral part of these financial statements.
27
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
1. Description of Business
New Jersey Mining Company (“the Company”) was incorporated as an Idaho corporation on July 18, 1996. The Company's primary business is exploring for and developing gold, silver, and base metal mineral resources in the Greater Coeur d’Alene Mining District of North Idaho and extending into Western Montana.
The Company has started minor production from high grade reserves located near the surface with the strategy to generate cash to be used for additional exploration to discover major mineral resources on its properties. The Company has not yet developed sufficient reserves to justify investment in a major mine, thus it remains in the development stage.
2. Summary of Significant Accounting Policies
Development Stage Enterprise
The
Company's financial statements are prepared in accordance with accounting
guidance for development stage entities as it devotes substantially all of its
efforts to acquiring and developing mining interests that will eventually
provide sufficient net profits to sustain the Company’s existence. Until such
interests are engaged in major commercial production, the Company will continue
to prepare its financial statements and related disclosures in accordance with
entities in the development stage.
In conjunction with development stage disclosure requirements, inception to date figures are included in the financial statements. These figures while labeled “unaudited” have all been audited by various accounting firms in their respective years. However, they have not as a whole been audited by the current auditing firm resulting in the unaudited classification.
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Revenue Recognition
As a development
stage company, our revenue from operations is referred to as income earned
during the development stage. Revenue is recognized when title and risk of
ownership of metals or metal bearing concentrate have passed and collection is
reasonably assured. Revenue from the sale of metals may be subject to adjustment
upon final settlement of estimated metal prices, weights and assays, and are
recorded as adjustments to revenue in the period of final settlement of prices,
weights and assays; such adjustments are typically not material in relation to
the initial invoice amounts.
Inventory
Dore' and process
inventories are stated at the lower of average cost incurred or net realizable
value.
Timber Sales
Revenue from harvest of
raw timber is recognized when a contract has been established, the timber has
been shipped, and payment is deemed probable. These sales of timber found on the
Company’s mineral properties are not a part of normal operations.
Drilling and Exploration Contract Income
Revenue received from drilling and exploration contracts with third
parties is recognized when the contract has been established, the services are
rendered and payment is deemed probable. These services are not a part of normal
operations.
Engineering Services Income
Revenue
received from engineering services provided is recognized when services are
rendered and payment is deemed probable. These services are not a part of normal
operations.
Accounting for Investments in Joint Ventures
The Company’s investments in joint ventures are recorded at cost or the
net carrying value of assets contributed to the venture. Joint ventures in which
the Company does not have the ability to exercise significant influence are
accounted for using the cost method. Under the cost method, these investments
are carried at the lower of cost or fair value. For joint ventures in which the
Company is deemed to have the ability to exercise significant influence, the
Company will utilize the equity method of accounting whereby it will recognize
its proportionate share of the joint venture’s earnings and losses. The Company
recognizes an impairment charge when a decline in the fair value of its
investment in joint venture below the carrying value is judged to be
other-than-temporary.
Income Taxes
Income taxes are
accounted for under the liability method. Under this method 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 expected to be paid or
recovered. A valuation allowance is recorded to reduce the deferred tax assets,
if there is uncertainty regarding their realization.
28
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
2. Summary of Significant Accounting Policies, continued:
Fair Values of Financial Instruments
The table below sets forth our financial assets that were accounted for
at fair value at December 31, 2010 and 2009, and their respective hierarchy
level. Hierarchy level is determined by segregating fair value measurements
using quoted prices in active markets for identical assets or liabilities (Level
1), significant other observable inputs (Level 2), and significant unobservable
inputs (Level 3).We had no other assets or liabilities accounted for at fair
value at December 31, 2010 or 2009.
| Balance at December 31, 2010 |
Balance at December 31, 2009 |
Hierarchy Level | |
| Investments in marketable equity securities | $19,344 | $21,665 | Level 1 |
The carrying amounts of financial instruments including cash and cash equivalents, reclamation bonds, investment in marketable equity securities, note payable to related party, obligations under capital lease and notes payable approximate their fair values.
Investment in Marketable Equity Securities
Marketable equity securities are classified as available for sale and
are valued at the market price. Realized gains and losses on the sale of
securities are recognized on a specific identification basis. Unrealized gains
and losses are included as a component of accumulated other comprehensive income
(loss), unless an other than temporary impairment in value has occurred, which
would then be charged to current period net income (loss).
Net Loss Per Share
Net loss per share
is computed by dividing net loss by the weighted average number of common shares
outstanding during the year. Diluted net loss per share reflects the potential
dilution that could occur from common shares issuable through stock options,
warrants, and other convertible securities. For the years ended December 31,
2010 and 2009, the effect of the Company’s potential issuance of shares from the
exercise of warrants would have been anti-dilutive. Accordingly, only basic net
loss per share has been presented. Outstanding warrants are discussed in detail
in Note 9 of the financial statements.
Reclassifications
Certain prior period
amounts have been reclassified to conform to the 2010 financial statement
presentation. These reclassifications had no effect on net loss or stockholders'
equity as previously reported.
Cash and Cash Equivalents
The Company
considers cash in banks and other deposits with an original maturity of three
months or less, that can be liquidated without prior notice or penalty, to be
cash and cash equivalents.
Property, Plant and Equipment
Property, plant and equipment are stated at the lower of cost or
estimated net realizable value. Depreciation and amortization are based on the
estimated useful lives of the assets and are computed using straight-line or
units-of-production methods. The expected useful life of most of the Company’s
buildings is up to 50 years and equipment life expectancy ranges between two and
ten years. When assets are retired or sold, the costs and related allowances for
depreciation and amortization are eliminated from the accounts and any resulting
gain or loss is reflected in operations.
Mineral Properties
Significant
payments related to the acquisition of mineral properties, mineral rights, and
mineral leases are capitalized.
If a commercially mineable ore body is discovered, such costs are amortized when production begins using the units-of-production method based on proven and probable reserves. If no commercially mineable ore body is discovered, or such rights are otherwise determined to have no value, such costs are expensed in the period in which it is determined the property has no future economic value.
Mine Exploration and Development Costs
The Company records exploration costs as such in the period they occur.
Mine development costs are capitalized as deferred development costs after
proven and probable reserves have been identified. Interest costs incurred
during the development stage are capitalized. Amortization is calculated using
the units-of-production method over the expected life of the operation based on
the estimated recoverable mineral ounces.
Claim Fees
Unpatented claim fees paid
at time of staking are expensed when incurred. Recurring renewal fees which are
paid annually are recorded as prepaid and expensed over the course of the year.
29
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
2. Summary of Significant Accounting Policies, continued:
Property Evaluations
Annually, or more
frequently as circumstances require, the Company evaluates the carrying amounts
of its mineral properties, including deferred development costs, to assess
whether such amounts are recoverable. Estimated undiscounted future net cash
flows from each mineral property are calculated using estimated future
production, three year average metals prices, operating capital and costs, and
reclamations costs. An impairment loss is recognized when the estimated future
cash flows (undiscounted and without interest) expected to result from the use
of an asset are less than the carrying amount of the asset. The Company’s
estimates of future cash flows are subject to risks and uncertainties. It is
reasonably possible that changes in estimates could occur which may affect the
expected recoverability of the Company’s investments in mineral properties.
Asset Retirement Obligations and Remediation
Costs
Mineral properties are subject to standards for mine reclamation that have
been established by various governmental agencies. Asset retirement obligations
are related to the retirement of the mine, if a reasonable estimate of fair
value can be determined. These obligations are initially measured at fair value
with the resulting cost capitalized at the present value of estimated reclamation
costs. An asset and a related liability are recorded for the present value of
these costs. The liability is accreted and the asset amortized over the life
of the related asset. Adjustments are made for changes resulting from either
the timing or amount of the original present value estimate underlying the obligation.
If there is an impairment to an asset’s carrying value and a decision is
made to permanently close the property, changes to the liability are recognized
and charged to the provision for closed operations and environmental matters.
Reclamation Bonds
Various laws and
permits require that financial assurances be in place for certain environmental
and reclamation obligations and other potential liabilities. The reclamation
bond balances at December 31, 2010 and 2009, represent an investment in U.S.
government agency bonds. The bonds are restricted to ensure that reclamation is
performed at certain properties where the Company is conducting mining and
exploration activities.
Share Based Compensation or Payments
All transactions in which goods or services are received for the
issuance of shares of the Company’s common stock are accounted for based on the
fair value of the consideration received or the fair value of the common stock
issued, whichever is more reliably measurable.
3. Property, Plant and Equipment
Property, plant and equipment at December 31, 2010 and 2009, consisted of the following:
| 2010 | 2009 | |||||
| Mill building at cost | $ | 128,566 | $ | 128,566 | ||
| Milling equipment at cost | 1,095,330 | 1,068,662 | ||||
| Less accumulated depreciation | (80,385 | ) | (77,856 | ) | ||
| Total mill | 1,143,511 | 1,119,372 | ||||
| Building and equipment at cost | 479,720 | 638,795 | ||||
| Less accumulated depreciation | (379,038 | ) | (483,935 | ) | ||
| Total building and equipment | 100,682 | 154,860 | ||||
| Land | 79,137 | 79,137 | ||||
| Total | $ | 1,323,330 | $ | 1,353,369 |
For years ending December 31, 2010 and 2009, milling and other equipment include assets under capital lease amounting to $49,763 and $132,769 respectively. The leases are being amortized over the terms of the respective lease. Accumulated amortization at December 31, 2010 and 2009 was $33,740 and $103,239, respectively. At December 31, 2010, the estimated future minimum lease payments under capital leases were as follows:
| Year ending December 31, | |||
| 2011 | $ | 14,619 | |
| 2012 | 1,488 | ||
| Total | 16,107 | ||
| Less: Amounts representing interest costs | (1,458 | ) | |
| Net present values | 14,649 | ||
| Less: Capital lease obligations-current portion | (13,246 | ) | |
| Long-term capital lease obligations | $ | 1,403 |
30
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
4. Notes Payable
| At December 31, 2010 and 2009, notes payable are as follows: | 2010 | 2009 | ||||
| Dodge pickup 60
month note payable, 0.00% interest rate; collateralized by
pick-up, monthly payments of $557 |
$ | 2,786 | $ | 9,471 | ||
| Hagby Diamond
Drill 48 month note payable, 8.00% interest rate
payable monthly, collateralized by drill, monthly payments of $4,093 |
35,642 | 76,407 | ||||
| Ingersoll Rand
Compressor 36 month note payable, 4.90% interest rate
payable monthly, collateralized by compressor, monthly payments of $670 |
667 | |||||
| Caterpillar 305
Excavator 48 month note payable, 7.81% interest rate
payable monthly, collateralized by excavator, monthly payments of $956 |
4,685 | 15,335 | ||||
| Kubota 5700
Tractor 36 month note payable, 0.00% interest rate,
collateralized by tractor, monthly payments of $674 |
3,370 | |||||
| Property with
shop 36 month note payable, 4.91% interest rate
payable monthly, remaining principal of note due in one payment at end of term, monthly payments of $474 |
58,875 | 60,000 | ||||
| Bobcat S250 50
month note payable, 0.00% interest rate collateralized by
bobcat, monthly payments of $725 |
17,393 | 26,089 | ||||
| Total notes payable | 119,381 | 191,339 | ||||
| Due within one year | 54,661 | 134,689 | ||||
| Due after one year | $ | 64,720 | $ | 56,650 |
Maturities of debt outstanding at December 31, 2010 are as follows: $54,661 in 2011, $11,702 in 2012, and $53,018 in 2013.
5. Mineral Properties
Mineral properties and deferred development costs are as follows:
| December 31, 2010 | ||||||||||
| Deferred | ||||||||||
| Properties | Development | Total | ||||||||
| New Jersey Mine | ||||||||||
| Grenfel/Coleman | $ | 365,000 | $ | 239,792 | $ | 604,792 | ||||
| Silver Strand | 74,704 | 77,872 | 152,576 | |||||||
| Roughwater | 25,500 | 25,500 | ||||||||
| Lost Eagle | 5,000 | 5,000 | ||||||||
| Revett Niagara | 52,500 | 52,500 | ||||||||
| Copper Camp | 52,500 | 52,500 | ||||||||
| Less Accumulated | ||||||||||
| Amortization | (11,743 | ) | (9,751 | ) | (21,494 | ) | ||||
| Total | $ | 563,461 | $ | 307,913 | $ | 871,374 | ||||
| December 31, 2009 | ||||||||||
| Deferred | ||||||||||
| Properties | Development | Total | ||||||||
| New Jersey Mine | ||||||||||
| Grenfel/Coleman | $ | 365,000 | $ | 239,792 | $ | 604,792 | ||||
| Golden Chest | 65,000 | 579,393 | 644,393 | |||||||
| Silver Strand | 74,704 | 77,872 | 152,576 | |||||||
| Roughwater | 25,500 | 25,500 | ||||||||
| Lost Eagle | 5,000 | 5,000 | ||||||||
| Revett Niagara | 42,000 | 42,000 | ||||||||
| Copper Camp | 42,000 | 42,000 | ||||||||
| Less Accumulated | ||||||||||
| Amortization | (59,059 | ) | (49,243 | ) | (108,302 | ) | ||||
| Total | $ | 560,145 | $ | 847,814 | $ | 1,407,959 | ||||
31
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
5. Mineral Properties, continued:
Grenfel
The Company's Grenfel property is a
leasehold interest covering the mineral rights of 68 acres located at the New
Jersey Mine area of interest. The lease was acquired from Mine Systems Design
(MSD) in 2001 in exchange for 1,000,000 shares of the Company’s common stock.
The 1,000,000 shares were valued at $0.10 per share, which approximated the
market price for the restricted common stock on the date of the lease. MSD is
also a major shareholder of the Company and is owned by Fred Brackebusch and
Grant Brackebusch, officers and directors of the Company. The lease has a
fifteen year term, and includes a 3% net smelter return (NSR) royalty that will
be paid to MSD on any production achieved from the property.
Coleman
The Coleman property is located at
the New Jersey Mine area of interest and consists of 62 acres of patented mining
claims, mineral rights to 108 acres of fee land, and approximately 130 acres of
unpatented mining claims. The Coleman property was acquired in October 2002,
with the acquisition of Gold Run Gulch Mining Company. At December 31, 2010 and
2009 deferred development includes asset retirement costs of $6,341.
Silver Strand
The Silver Strand mine consists
of 15 unpatented claims and was acquired from Trend Mining Company (Trend) in
2000. The property was purchased in exchange for 50,000 shares of the Company’s
common stock and a 1.5% NSR royalty initially capped at $50,000 and then
decreasing to 0.5% . In July of 2001, MSD assumed Trend’s position in the
agreement, and retained the NSR royalty interest. Deferred development includes
asset retirement costs of $19,572 at December 31, 2010 and 2009.
Revett Niagara
The Company signed an
exploration agreement with Revett Metals Associates (RMA) in December 2006. The
exploration agreement has a term of five years, beginning on December 2, 2006,
and is for nine unpatented claims that cover the deposit. In addition, the
exploration agreement covers an area of mutual interest within ½ mile of the
property excluding properties which are valued primarily for their gold
mineralization. Upon signing the agreement, the Company issued 30,000 shares of
restricted common stock valued at $0.50 to RMA and paid $4,500. At each
anniversary of the signing, the Company has agreed to pay $3,000 and issue
30,000 shares of restricted common stock to RMA. Any time prior to the
expiration of the exploration agreement, the Company can exercise an option to
convert the exploration agreement to a mining agreement. If exercised, the
mining agreement would have a term of 25 years, and the Company would pay a NSR
royalty to RMA of 3.0% on ores or concentrates mined on the property. The
Company is granted the option to purchase 90% of the NSR royalty from RMA for
$2,500,000 which would leave a remaining royalty of 0.3% .
Copper Camp
The Company signed an exploration
agreement with RMA in November 2007. The exploration agreement has a term of
five years, beginning on November 28, 2007, and is for nine unpatented claims
that cover the prospect. In addition, the exploration agreement covers an area
of mutual interest within ½ mile of the property, excluding properties which are
valued primarily for their gold mineralization. Upon signing the agreement, the
Company issued 30,000 shares of restricted common stock valued at $0.50 to RMA
and paid $4,500. At each anniversary of the signing, the Company had agreed to
pay $3,000 and issue 30,000 shares of restricted common stock to RMA. In
addition to the 30,000 share scheduled stock payment, in 2009 and 2010, 12,000
shares of restricted common stock were issued, annually, in lieu of the
scheduled cash payment. Any time prior to the expiration of the exploration
agreement, the Company can exercise an option to convert the exploration
agreement to a mining agreement. If exercised, the mining agreement would have a
term of 25 years, and the Company would pay a NSR royalty to RMA of 3.0% on ores
or concentrates mined on the property. The Company is granted the option to
purchase 90% of the NSR royalty from RMA for $2,500,000 which would leave a
remaining royalty of 0.3% .
Roughwater/Silver Button
The Silver Button
claim is the remaining property of the ten claims acquired from Roughwater
Mining Company. During 2005, the other nine Roughwater unpatented claims were
dropped. In 2001, the Company purchased the property through the issuance of
255,000 shares of its common stock to Roughwater Mining Company. The shares were
valued at $0.10 per share, for a total acquisition cost of $25,500.
Lost Eagle
Lost Eagle is a gold and silver
exploration project consisting of five claims covering 100 acres of federal land
administered by the U.S. Forest Service. In 2001, the Company issued 50,000
shares of stock to an individual to acquire the property. The shares were valued
at $0.10 per share for a total acquisition cost of $5,000.
Wisconsin Teddy
The Wisconsin Teddy is an exploration project that lies north of the New Jersey
Mine and covers 83 acres of unpatented claims on federal land administered by
the U.S. BLM. The project has no carrying value.
32
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
5. Mineral Properties, continued
Zanetti Mining Lease
The Company has been
assigned a mining lease with William Zanetti. The lease provides for the
Company's exploration, development and mining of minerals on fee land through
October 2008 and thereafter, as long as mining operations are deemed continuous.
The lease provides for production royalties of 5% of net sales of ores or
concentrates. Additional production royalties of 1% to 5% are due if gold
exceeds a certain price per troy ounce as adjusted annually for inflation. At
December 31, 2009, the gold price that would cause additional production
royalties to be payable was $717 per troy ounce. Also, advance royalties of $500
are required annually under the lease. These advance royalties are charged to
expense as incurred, but are still accumulated and will be credited against
production royalty obligations if and when production ensues. The lessor may
terminate the lease upon the Company's failure to perform under the terms of the
lease; and the Company has the right to terminate the lease at any time. See
Note 13 Subsequent Events.
Golden Chest Mining Leases
On January
3, 2005, the Company signed mining leases on the Golden Chest with Metaline
Contact Mines (MTLI), J.W. Beasley Interests, LLC (JWBI) and Prichard Creek
Resource Partners, LLC (PCRP) that covered approximately 300 acres. The term of
the leases was fifteen years, with stipulations. A NSR royalty of 3%, and
additional royalties and share issuances were also part of the lease.
In December 2010, Golden Chest LLC (GC) (See Note 7) purchased the patented mining claims from MTLI, JWBI, and PCRP for $3.75 million. At closing, $500,000 was paid and the remainder is due under a Promissory Note and Mortgage at the rate of $500,000 per year and $250,000 in the seventh and final year. As part of the purchase, the leases were cancelled and the Company's interest in the Golden Chest was transferred to GC. See Note 7 for further information.
6. Asset Retirement Obligation
The Company has established asset retirement obligations associated with the ultimate closing of its properties. Below is a reconciliation as of December 31, 2010 and 2009 of the Company’s asset retirement obligations. The estimated reclamation costs were discounted using a credit adjusted, risk-free interest rate of 5.6% .
| 2010 | 2009 | |||||
| Balances at January 1 | $ | 25,913 | $ | 53,500 | ||
| Changes in obligations due to disturbance of properties | ||||||
| Changes in obligations due to changes in timing of reclamation expenditures | (28,030 | ) | ||||
| Accretion expense | 3,472 | 443 | ||||
| Balances at December 31 | $ | 29,385 | $ | 25,913 |
7. Mining Venture Agreements
Golden Chest LLC (GC)
In December of
2010, a limited liability company (LLC) was formed between the Company and
Marathon Gold USA (MUSA). MUSA's contribution to GC is $4,000,000 payable in
installments ending on November 30, 2011. The Company's contribution to GC with a carrying value of $553,205 includes all of the its interests in the Golden Chest mine, including unpatented claims and some mining equipment. In connection with this
transaction, the 2005 mining leases with Metaline Contact Mines, J.W. Beasley
Interests, LLC, and Prichard Creek Resource Partners, LLC (see Note 5) were
cancelled in December 2010. GC purchased the patented mining claims from
Metaline Contact Mines, J.W. Beasley Interests, LLC, and Prichard Creek Resource
Partners, LLC for $3.75 million with $500,000 paid at closing in December 2010
and the remainder due under a Promissory Note and Mortgage at the rate of
$500,000 per year with the $250,000 balance due in the seventh and final year.
Newmont Venture Agreement
The Company
entered into a venture agreement with Newmont North America Exploration Limited
("Newmont") in March 2008, relating to exploration of the Company's Toboggan
Project which includes the following prospects: Gold Butte, Mineral Ridge,
Golden Reward, Progress, and Independence. Newmont is conducting exploration in
a 38 square mile area centered on the prospects that the Company has staked in
the past two years. To earn a participating interest in the Venture, Newmont is
required to contribute $2,000,000 in exploration expenditures as follows:
$300,000 on or before March 2009, an additional $700,000 by March 2010, and an
additional $1,000,000 by March 2011. Newmont has made satisfactory progress
toward competing their required expenditures to date and completed three field
seasons of exploration work.
8. Income Taxes
The Company did not recognize a provision (benefit) for income taxes for the years ended December 31, 2010 and 2009.
At December 31, 2010 and 2009, the Company had deferred tax assets principally arising from the net operating loss carry forwards for income tax purposes multiplied by an expected rate of 40%. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax assets, a valuation allowance equal to the deferred tax asset has be established at December 31, 2010 and December 31, 2009. The significant components of the deferred tax asset at December 31, 2010 and 2009 were as follows:
33
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
8. Income Taxes, continued
| December 31, | December 31, | ||||||
| 2010 | 2009 | ||||||
| Deferred tax asset | |||||||
| Net operating loss carry forward | $ | 2,900,000 | $ | 2,700,000 | |||
| Exploration costs | 198,000 | 160,000 | |||||
| 3,098,000 | 2,860,000 | ||||||
| Deferred tax asset valuation allowance | (3,098,000 | ) | (2,860,000 | ) | |||
| Net deferred tax asset | $ | — | $ | — |
At December 31, 2010 and 2009 the Company had net operating loss carry forwards of approximately $7,260,000 and $6,720,000 respectively, which expire in the years 2017 through 2030.
The income tax benefit shown in the financial statements for the years ended December 31, 2010 and 2009 differs from the statutory rate as follows:
| December 31, | December 31, | ||||||
| 2010 | 2009 | ||||||
| Benefit at statutory rate | $ | (184,000 | ) | $ | (290,000 | ) | |
| State taxes, net of federal taxes | (54,000 | ) | (50,000 | ) | |||
| Increase in valuation allowance | 238,000 | 340,000 | |||||
| Total provision (benefit) | $ | 0 | $ | 0 |
The Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns and found no positions that would require a liability for unrecognized income tax benefits to be recognized.
We have determined that we are open to examination of our income tax filings in the United States and state jurisdictions for the 2007 through 2010 tax years. 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.
9. Equity
The Company has authorized 50,000,000 shares of no par common stock. In addition, the Company has authorized 1,000,000 shares of no par preferred stock, none of which had been issued at December 31, 2010 or 2009.
Private Placements
In March of 2010
the Company completed a private placement which was initiated in September of
2009, each unit selling for $0.17 and consisting of one share of restricted
common stock and one common stock purchase warrant, whereby each warrant may
purchase one share of the Company’s unregistered common stock at $0.30 until
January 31, 2013. A total of 3,658,530 units were sold in the private placement
and resulted in net proceeds of $563,670. Of those units, 138,000 were issued in
2009 for net proceeds of $34,500.
In August of 2010, the Company sold 300,000 units at $0.17 per unit, providing net proceeds of $51,000 to the Company. Each unit consists of one share of restricted common stock and one common stock purchase warrant, whereby each warrant may purchase one share of the Company’s unregistered common stock at $0.30 until January 31, 2013.
In December of 2010, the Company sold 2,000,000 units at $0.20 per unit, providing net proceeds of $399,990 to the Company. Each unit consists of one share of restricted common stock and one common stock purchase warrant, whereby each warrant may purchase one share of the Company’s unregistered common stock at $0.30 until January 31, 2013.
Exercise of Stock Purchase Warrants
No common stock purchase warrants were exercised in 2009. During 2010 common
stock purchase warrants were exercised by warrant holders that had purchased
units of common stock and common stock purchase warrants during the Company's
previous private placement offerings. During 2010, the Company issued 206,500
shares of its restricted common stock at $0.17 per share, generating net proceeds
of $33,936 pursuant to the exercise of these warrants.
34
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
9. Equity continued:
Stock Purchase Warrants Outstanding
Transactions in common stock purchase warrants for the years ended
December 31, 2010 and 2009, are as follows:
| Number of | Exercise | ||||||
| Warrants | Prices | ||||||
| Balance, December 31, 2008 | 1,676,677 | $0.50-0.60 | |||||
| Issued in connection with private placement | 138,000 | 0.40 | |||||
| Expired | (1,451,427 | ) | 0.50 | ||||
| Balance, December 31, 2009 | 363,250 | 0.40-0.60 | |||||
| Issued in connection with private placements | 5,961,550 | 0.30 | |||||
| Exercised | (206,500 | ) | 0.17 | ||||
| Expired | (18,750 | ) | 0.60 | ||||
| Balance, December 31, 2010 | 6,099,550 | 0.30-0.40 |
These warrants expire as follows:
| Shares | Exercise Price | Expiration Date |
| 138,000 | $0.40 | October 19, 2012 |
| 5,961,550 | $0.30 | January 31, 2013 |
| 6,099,550 |
Common Stock Issued for Property, Plant and
Equipment
During 2010 and 2009, the Company issued 72,000
shares, annually, of its restricted common stock for mineral properties. The
Company recorded $18,000 each year, during 2010 and 2009, based upon the value
of the shares issued.
Common Stock Issued for Services and
Exploration
During 2010 and 2009, the Company issued 81,000
and 175,520 shares, respectively, of its restricted common stock for exploration
and other services rendered the Company. The Company recorded $17,426 and
$40,348, respectively, based upon the value of the services rendered and the
shares issued.
Common Stock Issued in Exchange for Accounts
Payable
During 2010 the Company issued 2,600 shares of its
restricted common stock in exchange for accounts payable related to buildings
and equipment purchases. The Company recorded $525 based upon the value of the
accounts payable and the shares issued.
10. Related Party Transactions
Fred Brackebusch is President, Treasurer, and a Director of the Company. Grant Brackebusch, Fred Brackebusch's son, is the Vice-President and a Director of the Company. Grant Brackebusch's wife, Tina Brackebusch, is the Company's Corporate Secretary. Fred Brackebusch and Grant Brackebusch own 89.6% and 10.4%, respectively of Mine Systems Design, Inc. ("MSD"), a firm that has various related party transactions with the Company. NJMC owns 50% of GC LLC formed to develop the Golden Chest area of interest near Murray Idaho.
In addition to the related party transactions described in Note 5 and 7, the Company had the following transactions with related parties:
-
During the year ended December 31, 2009, the Company issued 651,320 of its restricted common stock valued at $195,398 to Fred Brackebusch for management services. During the year ended December 31, 2009 the Company issued 338,000 shares of its restricted common stock valued at $101,400 to Grant Brackebusch for management services. No shares were issued to either party for management services in 2010
-
During 2010 and 2009 the Company issued 25,000 shares of its restricted stock valued at $5,000 and $6,250, respectively, to Tina Brackebusch for services as the Corporate Secretary.
-
During the years ended December 31, 2010 and 2009, the Company issued 125,000 shares, of its restricted common stock to members of the Board of Directors for their services as directors. These stock awards were recorded as directors' fees of $25,000 and $31,250, respectively, based upon the estimated value of the shares issued and services rendered. Fred and Grant Brackebusch each received 25,000 shares in 2010 and 2009, as Directors of the Company.
-
During each of the two years ended December 31, 2010 and 2009 the Company paid $6,000 to MSD for office rent. The December 31, 2009 note payable to related party balance includes $6,000 for the 2009 office rent.
-
During 2009 an unsecured line of credit with annual interest rates ranging from 1% to 5.25% and a maximum of $100,000 was extended to the Company by President Fred Brackebusch for cash shortfalls. As of December 31, 2009 the note payable to related party balance was $72,107 which included $2,657 in interest and fees that was recognized as an expense during the year ended December 31, 2009. This note was paid in full during 2010.
-
At December 31, 2010 NJMC was owed $2,065 in miscellaneous receivable from GC LLC.
35
New Jersey Mining Company
(A Development Stage
Company)
Notes to Financial Statements
11. Investment in Marketable Security
In 2006, the Company purchased 1,875,000 common shares of Gold Crest Mines Inc for $7,500. In 2009 the Company sold 665,620 of those shares for cash proceeds of $24,823, resulting in a realized gain of $22,160. No shares were sold in 2010.
At December 31, 2010, the Company held 967,180 of these shares with a market value of $0.02 per share, for a total market value of $19,344. At December 31, 2010, the excess market value of $15,475 over the $3,868 remaining cost basis of the shares was recognized as accumulated other comprehensive income in the equity section of the Company’s balance sheet.
12. Commitments and Contingencies
The Company owns or leases several mineral properties located in the Coeur d’Alene River Basin. In recent years, certain other companies involved in mining activities on property interests upland of the Coeur d'Alene River Basin have been identified as potentially responsible parties under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), and have entered into consent decrees with the EPA and the state of Idaho, concerning environmental remediation obligations and damages to or loss of natural resources in the Coeur d'Alene River Basin. The Company has not received any notification of a pending action or proceeding against the Company relating to environmental claims or assessments. It is possible, however, that the Company’s obligation could change in the near or longer term, and the resultant liability or claim for damages could have a material adverse effect on the Company.
NJMC's property holdings include approximately 161 unpatented mining claims from the Bureau of Land Management for which payment of $125 each is due September 1, 2011. If these fees are not paid, the claims will be considered abandoned.
13. Subsequent Events
In January 2011, a venture agreement was signed by the Company and United Mine Services, Inc. (UMS) relating to the New Jersey mineral processing plant. To earn a one third interest in the venture, UMS will provide funding to expand the processing plant to 15 tonnes/hr, which is estimated to cost $2.3 million. The proposed expansion budget included purchasing land held by the Company, known as the Zanetti Mining Lease, the lease was cancelled by the purchase of the land. The Company is the Operator of the venture and will charge operating costs to UMS for milling its ore up to 7,000 tonnes/month, retain a milling capacity of 3,000 tonnes/month, and as the operator of the venture receive a fee of $2.50/tonne milled.
36
ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A(T).
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
At December 31, 2010, our 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 December 31, 2010, 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.
Internal Control over Financial Reporting
Management’s Annual Report on Internal Control Over Financial Reporting
The management of New Jersey Mining Company is responsible for establishing and maintaining adequate internal control over financial reporting. This internal control system has been designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of the Company’s published financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
The management of New Jersey Mining Company has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010. To make this assessment, we used the criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, we believe that, as of December 31, 2010, the Company’s internal control over financial reporting is effective.
Fred Brackebusch, President, CEO and CFO
New Jersey Mining
Company
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions.
Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in internal control over financial reporting
The President and Principal Accounting Officer conducted evaluations of our internal controls over financial reporting to determine whether any changes occurred during the quarter ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. There was no material change in internal control over financial reporting in the quarter ended December 31, 2010.
37
ITEM 9B
OTHER INFORMATION
None.
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE;
| Name & Address | Age | Position | Date First Elected |
| Fred W. Brackebusch P.O. Box 1019 Kellogg, Idaho 83837 |
66 |
President, Director & Treasurer |
7/18/1996 |
| Grant A. Brackebusch P.O. Box 131 Silverton, ID 83867 |
41 |
Vice President & Director |
7/18/1996 |
| Ivan R. Linscott 7150 Burke Road Wallace, ID 83873 |
68 |
Director |
9/21/2004 |
| William C. Rust (1) P.O. Box 648 Wallace, ID 83873 |
64 |
Director |
9/21/2004 |
| M. Kathleen Sims (1) 2745 Seltice Way Coeur d’Alene, ID 83814 |
66 |
Director |
9/25/2003 |
| Tina C. Brackebusch P.O. Box 131 Silverton, ID 83867 |
41 |
Secretary |
1/1/1997 |
(1) Member of the Audit Committee
Directors are elected by shareholders at each annual shareholders meeting to hold office until the next annual meeting of shareholders or until their respective successors are elected and qualified.
Fred W. Brackebusch, P.E. has served as Chairman of the Board, President, Chief Executive Officer and Treasurer of the Company since 1996. He has a B.S. and an M.S. in Geological Engineering both from the University of Idaho. He is a consulting engineer with extensive experience in mine development, mine backfill, mine management, permitting, process control, and mine feasibility studies. He has over 40 years of experience in the Coeur d'Alene Mining District, about half of which was with Hecla Mining Co. He has been the principal owner of Mine Systems Design, Inc., a mining consulting business which is a large shareholder in the Company, since 1987.
Grant A. Brackebusch, P.E. has served as the Vice President and a Director of the Company since 1996. He holds a B.S. in Mining Engineering from the University of Idaho. He worked for Newmont Gold Co. on the Carlin Trend in open pit mine planning and pit supervision for three years. He also has worked with Mine Systems Design, Inc. performing various engineering and geotechnical tasks. He has worked for New Jersey Mining Company since 1996; he supervises the daily operations of the various mining operations, mill operations, performs various engineering tasks, and coordinates environmental permitting.
Ivan R. Linscott, PhD has served as a Director of the Company since 2004. He is a physicist at Stanford University. He is a Senior Research Associate for radioscience spacecraft instrument development and is Co-Investigator and Science Team Member for the New Horizons Mission to encounter the planet Pluto. Dr. Linscott has a strong interest in doing research on exploration techniques in the Coeur d’Alene Mining District. He has made significant contributions to the Company’s exploration program by performing geophysical surveys on the Company’s properties with the innovative use of experimental geophysical techniques.
William C. Rust has served as a Director of the Company since 2004. He is a metallurgical engineer with extensive experience in the Silver Valley. He worked for Asarco as Chief Metallurgist. Later he worked for CoCa mines at the Grouse Creek mine in Central Idaho and for McCulley, Frick, and Gilman, an environmental consulting firm. He was with Getchell Gold Inc. in Nevada where he was Mill Manager and Senior Metallurgist for a 3,200 ton/day gold plant. Currently, Mr. Rust is self-employed as a metallurgical engineering consultant. Mr. Rust is a member of the Audit Committee.
M. Kathleen Sims has served as a Director of the Company since 2004. She is a successful businesswoman who is majority owner of a Honda car dealership in Coeur d’Alene, Idaho. She is currently a Congresswoman and formerly a State Senator in the Idaho Legislature. She is a former member of the State of Idaho Human Rights Commission and is active in the Idaho Republican Party. She has extensive experience in starting a business with all the necessary experience in financing, business plans and management. Ms. Sims is the chairperson of the Audit Committee.
38
Tina C. Brackebusch has served as Secretary of the Company since 1996. She has served as Office Manager for the Company since 1996. She holds a B.S. in Secondary Education from the University of Idaho and teaches English at Wallace High School.
Family Relationships
Fred W.
Brackebusch is the father of Grant A. Brackebusch. Tina C. Brackebusch is the
wife of Grant A. Brackebusch.
Legal Proceedings
No Director or
Officer has been involved in any legal action involving the Company for the past
five years.
Section 16(a) Beneficial Ownership Reporting
Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
and the regulations thereunder, the Company’s Directors, Executive Officers
and beneficial owners of more than 10% of any registered class of the Company’s
equity securities are required to file reports of their ownership of the Company’s
securities and any changes in that ownership with the SEC. Based solely on its
review of copies of these reports and any written representations from such
reporting persons, the Company believes that during 2010 such filing requirements
were complied with.
Code of Ethics
The Company adopted a
Code of Ethics at a Board of Directors meeting on December 9, 2003, that applies
to the Company's executive officers. It can be found at the Company’s website
www.newjerseymining.com. The Company also
adopted a Code of Ethics for all employees at the Board of Directors meeting on
February 18, 2008.
Board Committee
At a Board of
Directors meeting on September 21, 2004, the Directors approved an audit
committee comprised of William C. Rust and M. Kathleen Sims. Each member of the
audit committee is deemed to be an independent director as that term is defined
in Rule 4200(a)(14) of the NASD’s listing standards. M. Kathleen Sims is the
Audit Committee Financial Expert as defined by Section 407 of the Sarbanes-Oxley
Act. The Board adopted an audit committee pre-approval policy. The audit
committee is required to pre-approve the audit and non-audit services performed
by the independent auditor in order to assure that the provision of such
services do not impair the auditor’s independence.
ITEM 11.
EXECUTIVE COMPENSATION
Compensation of Officers
A summary of cash and other compensation for Fred Brackebusch, the Company’s President and Chief Executive Officer, and Grant Brackebusch, the Company’s Vice President, (the “Named Executive Officers”), for the two most recent years is as follows:
Executive Officer Compensation Table
| Name & Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards1 ($) |
Option Awards ($) |
Nonequity Incentive Plan
Compensation ($) |
Nonqualified Deferred
Compensation Earnings ($) |
All Other
Compensation ($) |
Total ($) |
| Fred Brackebusch President |
2010 | 30,000 | 0 | 5,000 | 0 | 0 | 0 | 0 | 35,000 |
| 2009 |
26,250 |
0 |
201,648 |
0 |
0 |
0 |
0 |
227,898 | |
| Grant Brackebusch Vice Pres. |
2010 | 67,708 | 0 | 5,000 | 0 | 0 | 0 | 0 | 72,708 |
| 2009 |
46,263 |
0 |
107,650 |
0 |
0 |
0 |
0 |
153,913
|
(1) Stock Awards include fees earned as Directors.
The compensation of the Named Executive Officers has been set by disinterested members of the Board of Directors. In April of 2007, the Board of Directors approved a compensation plan for our President, Fred W. Brackebusch, that states that any time over 130 hours per month is compensated with restricted common stock at a rate of $150 per hour. In January of 2009, the Board of Directors approved a compensation plan for Vice President Grant Brackebusch that awarded him with restricted common stock for an average of 84.5 hours per month at a rate of $100 per hour. The number of shares was calculated quarterly using the average bid price for the quarter as quoted on the OTCQB. Additionally, in 2009, both Fred W. Brackebusch and Grant Brackebusch were compensated with shares in lieu of cash for some of their base salaries as well to conserve limited cash.
In 2010, the restricted stock compensation plans for both Fred W. Brackebusch and Grant A. Brackebusch were discontinued. During the years ended December 31, 2010 and 2009, the Company issued zero and 651,320 shares, respectively, of its restricted common stock valued at $0 and $195,398, respectively, to Fred Brackebusch for management services. During the years ended December 31, 2010 and 2009, the Company issued zero and 338,000 shares, respectively, of its restricted common stock valued at $0 and $101,400, respectively, to Grant Brackebusch for management services.
39
The Company does not have a retirement plan for its executive officers and there is no agreement, plan or arrangement that provides for payments to executive officers in connection with resignation, retirement, termination or a change in control of the Company.
Outstanding Equity Awards at Fiscal Year-end
The Company does not currently award the Named Executive Officers
options to purchase the Company’s shares, and there were no outstanding equity
awards as of December 31, 2010.
Director Compensation
A summary of compensation for the Company’s non-employee Directors, including Ivan R. Linscott, William C. Rust and M. Kathleen Sims for the two most recent years is as follows:
Director Compensation Table
| Name 1 |
Year |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Option Awards ($) |
Nonequity Incentive Plan Compensa- tion ($) |
Nonqualified Deferred Compensa- tion Earnings ($) |
All Other Compensa- tion ($) |
Total ($) |
| Ivan R. Linscott | 2010 | 0 | 5,000 | 0 | 0 | 0 | 0 | 5,000 |
| 2009 | 0 | 6,250 | 0 | 0 | 0 | 0 | 6,250 | |
| William C. Rust | 2010 | 0 | 5,000 | 0 | 0 | 0 | 0 | 5,000 |
| 2009 | 0 | 6,250 | 0 | 0 | 0 | 0 | 6,250 | |
| M. Kathleen Sims | 2010 | 0 | 5,000 | 0 | 0 | 0 | 0 | 5,000 |
| 2009 | 0 | 6,250 | 0 | 0 | 0 | 0 | 6,250 |
(1) Directors Fred W. Brackebusch and Grant A. Brackebusch are executive officers of the Company, therefore, disclosure regarding their compensation as Directors is included in the Executive Officer Compensative Table above
At a Board of Directors meeting on November 9, 2009, the Directors approved a compensation plan for the Board of Directors under which each Director receives 25,000 shares of unregistered Common Stock. In 2009 and 2010 these shares were valued at $6,250 and $5,000, respectively. No additional fees are paid for attendance at Board of Directors’ meetings, committee membership or committee chairmanship. On occasion, Directors are retained for consulting services unrelated to their duties as Directors. These consulting services are either paid in cash or with unregistered Common Stock according to the Company’s policy for share-based payment of services.
The Company does not have a retirement plan for its Directors and there is no agreement, plan or arrangement that provides for payments to Directors in connection with resignation, retirement, termination or a change in control of the Company.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information as of March 1, 2011 regarding the shares of Company Common Stock beneficially owned by: (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each Director of the Company; (iii) the CEO and CFO of the Company (the “Named Executive Officers”); and (iv) all Directors and the Named Executive Officers of the Company as a group. Except as noted below, each holder has sole voting and investment power with respect to the shares of the Company Common Stock listed as owned by that person.
Security Ownership of Certain Beneficial Owners
| Title of Class |
Name and Address Of Beneficial Owner | Amount and Nature of Beneficial Owner | Percent of Class1 |
| Common | Fred W. Brackebusch P.O. Box 1019 Kellogg, Idaho 83837 |
7,900,077 indirect (a)
1,807,861 direct |
21.56% |
| Common | Constance Meisel 105 East Atlantic Avenue Delray Beach, FL 33444 |
3,158,607 | 7.02% |
| Common | Terry & Marguerite Tyson
County Road U Lipscomb, TX 79056 |
1,608,528 direct 933,900 indirect |
5.65% |
| Common | William Ritger 750 Ocean Royale Way Juno Beach, FL 33408 |
3,162,425 | 7.02% |
(1)Based upon 45,022,862 outstanding shares of common stock as of March 1, 2011.
40
(a) Fred Brackebusch owns 89.6% of Mine Systems Design, Inc. (MSD) which is an S corporation that owns 8,817,050 common shares of the Company. Neither MSD nor Fred Brackebusch has the right to acquire any securities pursuant to options, warrants, conversion privileges or other rights.
Security Ownership of Management
| Title of Class |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Owner | Percent of Class1 |
| Common | Fred W. Brackebusch 89 Appleberg Road Kellogg, Idaho 83837 |
7,900,077 indirect (a)
1,807,861 direct |
1.56% |
| Common | Grant A. Brackebusch 89 Appleberg Road Kellogg, Idaho 83837 |
916,973 indirect (b)
725,920 direct |
3.65% |
| Common | Ivan R. Linscott, Director
7150 Burke Road Wallace, Idaho 83873 |
160,500 | 0.36% |
| Common | William C. Rust, Director
P.O. Box 648 Wallace, Idaho 83873 |
120,000 | 0.27% |
| Common | M. Kathleen Sims, Director
2745 Seltice Way Coeur d’Alene, Idaho 83814 |
133,000 | 0.29% |
| Common | All Directors and Executive Officers as a group (5 individuals) | 11,764,331 | 26.13% |
(1) Based upon 45,022,862 outstanding shares of common stock at March 1, 2011.
(a) Fred Brackebusch owns 89.6% of Mine Systems Design, Inc. (MSD) which is an S corporation that owns 8,817,050 common shares of the Company. Neither MSD nor Fred Brackebusch has the right to acquire any securities pursuant to options, warrants, conversion privileges or other rights.
(b) Grant Brackebusch owns 10.4% of Mine Systems Design, Inc. (MSD) which is an S corporation that owns 8,817,050 common shares of the Company. Neither MSD nor Grant Brackebusch has the right to acquire any securities pursuant to options, warrants, conversion privileges or other rights.
None of the Directors or Officers has the right to acquire any securities pursuant to options, warrants, conversion privileges or other rights. No shares are pledged as security.
Securities Authorized for Issuance under Equity
Plans
The Company does not have an equity compensation plan
for issuance of warrants, options or rights. However, the Board of Directors has
awarded Fred Brackebusch unregistered Common Stock in addition to his salary,
for 2009, for any hours worked over 130 hours per month at a rate of $150 per
hour. The Board awarded Grant Brackebusch unregistered Common Stock in addition
to his salary in 2009, for an average of 84.5 hours per month at a rate of $100
per hour. The number of shares to be awarded is calculated quarterly by using
the average bid price of the Company’s Common Stock. The payment of management
with unregistered Common Stock was discontinued in 2010. The Company also
occasionally pays for goods or services with unregistered Common Stock and uses
the average bid price of the stock at the time to determine the number of shares
to be issued.
Changes in Control
None.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
During each of the years ended December 31, 2009 and 2010, the Company issued
150,000 shares of its unregistered common stock to members of the Board of Directors
and Officers for their services. These stock awards were recorded as directors'
fees of $31,250 and $25,000, respectively, for directors and $6,250 and $5,000,
respectively, for management based upon the estimated value of the shares issued
and services rendered. Fred, Grant, and Tina Brackebusch each received 25,000
shares in 2009 and 2010 as Directors or Officers in each respective year.
During the year ended December 31, 2009, the Company issued 651,320 of its unregistered common stock valued at $195,398, to Fred Brackebusch for management services. During the year ended December 31, 2009, the Company issued 338,000 shares of its unregistered common stock valued at $101,400 to Grant Brackebusch for management services. No shares were issued to either party in 2010 for management services.
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Director Independence
The Board of
Directors has determined that each of the following Directors is an “independent
director” as such term is defined by the rules of the Financial Industry
Regulatory Authority (“FINRA”), and the Securities and Exchange Commission
(“SEC”): Ivan R. Linscott, William C. Rust, and M. Kathleen Sims. These three
Directors comprise a majority of the Board of Directors. The rules of FINRA and
the SEC generally provide that an “independent director” is a person other than
an officer or employee of the Company or any individual having a relationship
that, in the opinion of the Board of Directors, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
Director. The FINRA rules also provide specific criteria that, if met,
disqualify a director from being independent.
The Board of Directors does not have separately designated nominating or compensation committees. The entire Board performs these functions. At a Board of Directors meeting on September 21, 2004, the Directors approved an audit committee comprised of William C. Rust and M. Kathleen Sims. Each member of the audit committee is deemed to be an independent director as that term is defined in Rule 4200(a)(14) of the NASD’s listing standards. M. Kathleen Sims is the chairperson of the Audit Committee and the Audit Committee Financial Expert as defined by Section 407 of the Sarbanes-Oxley Act.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed
for professional services rendered by the Company’s principal accountant for the
audit of the annual financial statements included in the Company’s annual report
on Form 10-K for the fiscal years ended December 31, 2009 and December 31, 2010
and the review for the financial statements included in the Company’s quarterly
reports on Form 10-Q during those fiscal years, were $29,479 and $23,948
respectively.
Audit Related Fees
The Company
incurred no fees during the last two fiscal years for assurance and related
services by the Company’s principal accountant that were reasonably related to
the performance of the audit or review of the Company’s financial statements,
and not reported under “Audit Fees” above.
Tax Fees
The Company incurred no fees
during the last two fiscal years for professional services rendered by the
Company’s principal accountant for tax compliance, tax advice and tax planning.
All Other Fees
The Company incurred no
other fees during the last two fiscal years for products and services rendered
by the Company’s principal accountant.
Audit Committee Pre-Approval Policies
The Board of Directors has adopted an audit committee pre-approval
policy. The audit committee is required to pre-approve the audit and non-audit
services performed by the independent auditor in order to assure that the
provision of such services do not impair the auditor’s independence.
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PART IV
ITEM 15.
EXHIBITS
| (3)(i) | Articles of Incorporation-Filed as an exhibit to the registrant's registration statement on Form 10-SB (Commission File No. 000-28837) and incorporated by reference herein. |
| (3)(ii) | Bylaws-Filed as an exhibit to the registrant's registration statement on Form 10-SB (Commission File No. 000-28837) and incorporated by reference herein. |
| (10)(1) | Lease Agreement with William Zanetti-Filed as an exhibit to the registrant's registration statement on Form 10-SB (Commission File No. 000-28837) and incorporated by reference herein. |
| (10)(2) | Articles of Merger For Plainview Mining Company Inc. and New Jersey Mining Co.-Filed as an exhibit to the registrant's registration statement on Form 10-SB (Commission File No. 000-28837) and incorporated by reference herein. |
| (10)(3) | Lease Agreement with Mine Systems Design, Inc.-Filed as an exhibit to the registrant's annual report on Form 10-KSB for the year ended December 31, 2001 and incorporated by reference herein. |
| (10)(4) | Articles of Merger for Gold Run Gulch Mining Company and New Jersey Mining Co.-Filed as an exhibit to the registrant's annual report on Form 10-KSB for the year ended December 31, 2002 and incorporated by reference herein. |
| (10)(5) | Exploration Agreement and Option to Lease between Paymaster Resources, Inc. and New Jersey Mining Company with the approval of J.W. Beasley Interests LLC.-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. |
| (10)(6) | Exploration Agreement and Option to Lease between Prichard Creek Resource Partners LLC and New Jersey Mining Company.-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. |
| (10)(7) | Exploration Agreement and Option to Convert to Mining Agreement between RMA and New Jersey Mining Company. Filed as an exhibit to the registrant’s annual report on Form 10-KSB for the year ended December 31, 2006 and incorporated by reference herein. |
| (10)(8) | Exploration Agreement and Option to Convert to Mining Agreement between RMA and New Jersey Mining Company. Filed as an exhibit to the registrant’s annual report on Form 10-KSB for the year ended December 31, 2007. |
| (14) | Code of Ethics.-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. |
| (16) | Letter on Change in Certifying Accountant.-Filed as an 8-K report on December 10, 2003 and later filed as an 8-K/A on February 2, 2004, and incorporated by reference herein. |
| (31) | Rule 13a-15(e)/15d-15(e) Certifications |
| (31)(i) | |
| (32) | Section 1350 and Rule 13a-15(d) Certifications |
| (32)(i) | |
| (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. |
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SIGNATURES
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
New Jersey Mining Company
| Date: | March 30, 2011 | By /s/ FRED W. BRACKEBUSCH | |
| Fred W. Brackebusch, President, Treasurer & Director | |||
| Date: | March 30, 2011 | By /s/ GRANT A. BRACKEBUSCH | |
| Grant A. Brackebusch, Vice President & Director | |||
| Date: | March 30, 2011 | By /s/ IVAN R. LINSCOTT | |
| Ivan R. Linscott, Director | |||
| Date: | March 30, 2011 | By /s/ WILLIAM C. RUST | |
| William C. Rust, Director | |||
| Date: | March 30, 2011 | By /s/ M. KATHLEEN SIMS | |
| M. Kathleen Sims, Director |
44