• Filing Date: 2017-03-31
  • Form Type: 10-K
  • Description: Annual report
v3.7.0.1
8. Long-Term Debt
12 Months Ended
Dec. 31, 2016
Debt Disclosure [Abstract]  
Long - Term Debt
Long-Term debt at December 31, 2016 and 2015, is as follows:   December 31,     December 31,  
    2016     2015  
Note payable to First Security Bank, bearing interest at 6%;            
payable in monthly installments of $917; maturing            
September 2018; collateralized by equipment.   $ 18,245     $ 27,845  
Note payable to Caterpillar Financial Services, bearing interest at 6%;                
payable in monthly installments of $1,300; maturing                
August 2019; collateralized by equipment.     40,556       -  
Note payable to Wells Fargo Bank, bearing interest at 4%;                
payable in monthly installments of $477; original maturity date of                
December 2016; collateralized by equipment.     473       5,399  
Note payable to De Lage Landen Financial Services,                
 bearing interest at 5.30%; payable in monthly installments of $549;                
original maturity date of March 2016; collateralized by equipment.     -       2,171  
Note payable to De Lage Landen Financial Services,                
bearing interest at 3.51%; payable in monthly installments of $655;                
maturing September 2019; collateralized by equipment.     20,581       27,587  
Note payable to De Lage Landen Financial Services,                
bearing interest at 3.51%; payable in monthly installments of $655;                
maturing December 2019; collateralized by equipment.     22,944       29,300  
Note payable to Phyllis Rice, bearing interest                
at 1%; payable in monthly installments of $2,000;                
original maturity date of March 2015; collateralized by equipment.     14,146       14,146  
Obligation payable for Soyatal Mine, non-interest bearing,                
 annual payments of $100,000 or $200,000 through 2019, net of discount.     776,319       820,272  
Obligation payable for Guadalupe Mine, non-interest bearing,                
 annual payments from $60,000 to $149,078 through 2026, net of discount.     970,651       972,312  
      1,863,915       1,899,032  
Less current portion     (391,046 )     (181,287 )
Long-term portion   $ 1,472,869     $ 1,717,745  

 

At December 31, 2016, principal payments on debt are due as follows:

 

Year Ending December 31,      
2017   $ 391,046  
2018     260,232  
2019     307,081  
2020     198,436  
2021     108,150  
Thereafter     598,970  
    $ 1,863,915  

 

Guadalupe Mine

On March 7, 2012 and on April 4, 2012, the Company entered into a supply agreement and a loan agreement, respectively, (“the Agreements”) with several individuals collectively referred to as ‘Grupo Roga’ or ‘Guadalupe.’ During the term of the supply agreement the Company funded certain of Guadalupe’s equipment purchases, tax payments, labor costs, milling and trucking costs, and other expenses incurred in the Guadalupe mining operations for approximately $112,000. In addition to the advances for mining costs, the Company purchased antimony ore from Guadalupe that failed to meet agreed upon antimony metal recoveries and resulted in approximately $475,000 of excess advances paid to Guadalupe.

 

The Agreements with Guadalupe granted the Company an option to purchase the concessions outright for $2,000,000. On September 29, 2015, the Company notified the owners of Guadalupe that it was exercising the option to purchase the Guadalupe property. The option exercise agreement allowed the Company to apply all amounts previously due the Company by Guadalupe of $586,893 to the purchase price consideration, resulting in a net obligation for the purchase of the Guadalupe mine of $1,413,107. The Company is obligated to make annual payments that vary from $60,000 to $149,077 annually through 2026. The debt payments are non-interest bearing. In 2015, the Company determined the net present value of the future contractual stream of payments to be $972,722 using a 6% discount rate. The Company recorded $972,722 as the cost of the concessions and the debt payable equal to total payments due of $1,413,107 less a discount of $440,385. The discount is being amortized to interest expense using the effective interest method over the life of the debt. During the years ended December 31, 2016 and 2015, the Company paid $60,000 and $15,000 on this debt, respectively, and amortized $58,339 and $14,591, respectively, of discount.