ENTREE GOLD INC, 6-K filed on 8/14/2012
Report of Foreign Issuer
Document and Entity Information (USD $)
6 Months Ended
Jun. 30, 2012
Jul. 27, 2012
Document And Entity Information
 
 
Entity Registrant Name
ENTREE GOLD INC 
 
Entity Central Index Key
0001271554 
 
Document Type
6-K 
 
Document Period End Date
Dec. 31, 2011 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--12-31 
 
Is Entity a Well-known Seasoned Issuer?
No 
 
Is Entity a Voluntary Filer?
No 
 
Is Entity's Reporting Status Current?
Yes 
 
Entity Filer Category
Smaller Reporting Company 
 
Entity Public Float
 
   
Entity Common Stock, Shares Outstanding
 
128,877,243 
Document Fiscal Period Focus
Q2 
 
Document Fiscal Year Focus
2012 
 
CONSOLIDATED BALANCE SHEETS (USD $)
Jun. 30, 2012
Dec. 31, 2011
ASSETS
 
 
Cash and cash equivalents (Note 4)
$ 10,520,262 
$ 14,512,198 
Short-term investments (Note 4)
4,916,421 
Receivables
165,514 
424,522 
Prepaid expenses
407,053 
955,121 
Total current assets
11,092,829 
20,808,262 
Equipment (Note 6)
663,266 
754,846 
Mineral property interests (Note 8)
55,022,183 
52,678,763 
Reclamation deposits
397,958 
215,066 
Other assets
156,643 
132,873 
Total assets
67,332,879 
74,589,810 
Current
 
 
Accounts payable and accrued liabilities
580,829 
1,804,126 
Loans payable to Oyu Tolgoi LLC (Note 9)
4,863,805 
4,327,878 
Deferred income tax liabilities
8,014,607 
9,392,614 
Total liabilities
13,459,241 
15,524,618 
Stockholders' equity
 
 
Common stock, no par value, unlimited number authorized, (Note 10) 128,877,243 (December 31, 2011 - 127,016,788) issued and outstanding
167,428,814 
165,574,192 
Additional paid-in capital
18,655,473 
17,420,307 
Accumulated other comprehensive income (Note 13)
1,939,546 
1,901,351 
Accumulated deficit during the exploration stage
(134,150,195)
(125,830,658)
Total stockholders' equity
53,873,638 
59,065,192 
Total liabilities and stockholders' equity
$ 67,332,879 
$ 74,589,810 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 30, 2012
Dec. 31, 2011
Stockholders equity:
 
 
Common stock, par value
$ 0 
$ 0 
Common stock, Unlimited authorized shares
   
   
Common stock, issued shares
128,877,243 
127,016,788 
Common stock, outstanding shares
128,877,243 
127,016,788 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)
3 Months Ended 6 Months Ended 203 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
EXPENSES
 
 
 
 
 
Exploration (Note 8)
$ 2,402,084 
$ 5,698,144 
$ 6,018,071 
$ 9,345,806 
$ 90,773,394 
General and administration
1,068,765 
1,531,973 
3,138,367 
3,369,654 
51,249,390 
Depreciation
39,172 
50,083 
80,327 
106,563 
1,356,740 
Foreign exchange loss
79,550 
319,106 
104,888 
347,571 
374,386 
Impairment of mineral property interests
   
   
   
   
531,005 
Gain on sale of mineral property interests (Note 8)
   
(125,916)
(104,914)
(125,916)
(1,679,437)
Loss from operations
(3,589,571)
(7,473,390)
(9,236,739)
(13,043,678)
(142,605,478)
Gain on sale of investments (Note 5)
   
2,148,021 
 
2,148,021 
3,326,275 
Interest income
50,710 
129,259 
138,828 
210,258 
5,451,647 
Interest expense (Note 5)
(55,344)
(34,338)
(107,520)
(59,970)
(332,479)
Loss from equity investee (Note 5)
(189,507)
(645,264)
(492,113)
(1,289,608)
(4,410,742)
Fair value adjustment of asset backed commercial paper
   
   
   
   
(2,332,531)
Loss from operations before income taxes
(3,783,712)
(5,875,712)
(9,697,544)
(12,034,977)
(140,903,308)
Current income tax expense
   
   
   
   
(152,190)
Deferred income tax recovery
539,007 
2,257,762 
1,378,007 
3,074,762 
6,905,303 
Net loss
(3,244,705)
(3,617,950)
(8,319,537)
(8,960,215)
(134,150,195)
Comprehensive loss:
 
 
 
 
 
Net loss
(3,244,705)
(3,617,950)
(8,319,537)
(8,960,215)
(134,150,195)
Unrealized gain (loss) on available for sale securities (Note 13)
   
(2,069,863)
   
(1,458,928)
   
Foreign currency translation adjustment (Note 13)
(1,107,276)
472,699 
38,195 
1,966,358 
1,939,546 
Comprehensive loss
$ (4,351,981)
$ (5,215,114)
$ (8,281,342)
$ (8,452,785)
$ (132,210,649)
Basic and diluted net loss per share
$ (0.03)
$ (0.03)
$ (0.06)
$ (0.08)
 
Weighted average number of common shares outstanding
128,520,100 
114,392,617 
128,421,851 
114,363,263 
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $)
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income
Accumulated Deficit During the Exploration Stage
Total
Beginning balance, Amount at Jun. 30, 2011
$ 150,633,125 
$ 17,237,304 
$ 6,258,144 
$ (117,650,665)
$ 56,477,908 
Beginning balance, Shares at Jun. 30, 2011
114,664,764 
 
 
 
 
Exercise of stock options, Amount
331,728 
(125,112)
   
   
206,616 
Exercise of stock options, Shares
157,308 
 
 
 
 
Mineral property interests, Amount
1,579,168 
   
   
   
1,579,168 
Mineral property interests, Shares
700,000 
 
 
 
 
Stock-based compensation
   
192,964 
   
   
192,964 
Foreign currency translation adjustment
   
   
(4,276,782)
   
(4,276,782)
Changes in available for sale securities
   
   
(1,289,069)
   
(1,289,069)
Net loss
   
   
   
(3,506,238)
(3,506,238)
Ending balance, Amount at Sep. 30, 2011
152,544,021 
17,305,156 
692,293 
(121,156,903)
49,384,567 
Ending balance, Shares at Sep. 30, 2011
115,522,072 
 
 
 
 
Mineral property interests, Amount
19,753 
   
   
   
19,753 
Mineral property interests, Shares
12,500 
 
 
 
 
Stock-based compensation
   
115,151 
   
   
115,151 
Foreign currency translation adjustment
   
   
1,209,058 
   
1,209,058 
Marketed offering, Amount
14,075,483 
   
   
   
14,075,483 
Marketed offering, Shares
11,482,216 
 
 
 
 
Share issue costs
(1,065,065)
   
   
   
(1,065,065)
Net loss
   
   
   
(4,673,755)
(4,673,755)
Ending balance, Amount at Dec. 31, 2011
165,574,192 
17,420,307 
1,901,351 
(125,830,658)
59,065,192 
Ending balance, Shares at Dec. 31, 2011
127,016,788 
 
 
 
 
Exercise of stock options, Amount
(44,679)
44,679 
   
   
   
Mineral property interests, Amount
52,293 
   
   
   
52,293 
Mineral property interests, Shares
40,000 
 
 
 
 
Stock-based compensation
   
1,149,434 
   
   
1,149,434 
Foreign currency translation adjustment
   
   
1,145,471 
   
1,145,471 
Exercise of over allotment, Amount
1,628,583 
   
   
   
1,628,583 
Exercise of over allotment, Shares
1,320,455 
 
 
 
 
Share issue costs
(108,058)
   
   
   
(108,058)
Net loss
   
   
   
(5,074,832)
(5,074,832)
Ending balance, Amount at Mar. 31, 2012
167,102,331 
18,614,420 
3,046,822 
(130,905,490)
57,858,083 
Ending balance, Shares at Mar. 31, 2012
128,377,243 
 
 
 
 
Mineral property interests, Amount
326,483 
   
   
   
326,483 
Mineral property interests, Shares
500,000 
 
 
 
 
Stock-based compensation
   
41,053 
   
   
41,053 
Foreign currency translation adjustment
   
   
(1,107,276)
   
(1,107,276)
Net loss
   
   
   
(3,244,705)
(3,244,705)
Ending balance, Amount at Jun. 30, 2012
$ 167,428,814 
$ 18,655,473 
$ 1,939,546 
$ (134,150,195)
$ 53,873,638 
Ending balance, Shares at Jun. 30, 2012
128,877,243 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
3 Months Ended 6 Months Ended 203 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net loss
$ (3,244,705)
$ (3,617,950)
$ (8,319,537)
$ (8,960,215)
$ (134,150,195)
Items not affecting cash:
 
 
 
 
 
Depreciation
39,172 
50,083 
80,327 
106,563 
1,356,740 
Stock-based compensation
41,053 
138,077 
1,190,487 
683,046 
22,736,369 
Fair value adjustment of asset backed commercial paper
   
   
   
   
2,332,531 
Escrow shares compensation
   
   
   
   
2,001,832 
Mineral property interest paid in stock and warrants
   
   
   
   
4,052,698 
Loss from equity investee
189,507 
645,264 
492,113 
1,289,608 
4,410,742 
Interest expense
55,344 
34,338 
107,520 
59,970 
332,479 
Deferred income tax recovery
(539,007)
(2,257,762)
(1,378,007)
(3,074,762)
(6,905,303)
Gain on sale of mineral property interest
   
(125,916)
(104,914)
(125,916)
(1,679,437)
Impairment of mineral property interests
   
   
   
   
531,005 
Gain on sale of investments
   
(2,148,021)
 
(2,148,021)
(3,326,275)
Other items not affecting cash
155,371 
(34,338)
105,420 
(51,509)
150,837 
Changes in assets and liabilities:
 
 
 
 
 
Receivables
(30,793)
(100,139)
261,657 
67,675 
(68,396)
Prepaid expenses
136,115 
304,331 
339,681 
480,155 
(510,880)
Other assets
(32,502)
   
(32,502)
   
(32,502)
Accounts payable and accrued liabilities
(1,245,880)
1,349,132 
(1,193,830)
1,239,707 
318,664 
Net cash used in operating activities
(4,476,325)
(5,762,901)
(8,451,585)
(10,433,699)
(108,449,091)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Proceeds from issuance of capital stock
   
48,356 
1,628,583 
401,850 
131,003,994 
Share issue costs
   
   
(108,058)
   
(4,866,271)
Net cash provided by financing activities
   
48,356 
1,520,525 
401,850 
126,137,723 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Cash acquired on acquisition of PacMag Metals Limited
   
   
   
   
837,263 
Mineral property interest
(100,000)
30,797 
(2,210,000)
   
(3,204,610)
Reclamation deposits
32,502 
(62,819)
   
(62,819)
(211,188)
Short term investments
5,076,271 
   
5,076,271 
   
   
Purchase of asset backed commercial paper
   
   
   
   
(4,031,122)
Acquisition of PacMag Metals Limited
   
   
   
   
(7,465,495)
Acquisition of equipment
   
(36,017)
(17,307)
(200,267)
(2,105,026)
Proceeds from sale of mineral property interest
   
125,916 
104,914 
125,916 
1,596,305 
Proceeds from sale of investments
   
3,174,208 
   
3,174,208 
5,734,895 
Net cash provided by (used in) investing activities
5,008,773 
3,232,085 
2,953,878 
3,037,038 
(8,848,978)
Effect of foreign currency translation on cash and cash equivalents
(288,263)
498,708 
(14,754)
977,312 
1,680,608 
Change in cash and cash equivalents during the period
244,185 
(1,983,752)
(3,991,936)
(6,017,499)
10,520,262 
Cash and cash equivalents, beginning of period
10,276,077 
17,262,422 
14,512,198 
21,296,169 
   
Cash and cash equivalents, end of period
10,520,262 
15,278,670 
10,520,262 
15,278,670 
10,520,262 
Cash paid for interest during the period
   
   
   
   
   
Cash paid for income taxes during the period
   
   
   
   
   
1. NATURE OF OPERATIONS
Note 1. NATURE OF OPERATIONS

Entrée Gold Inc. was incorporated under the laws of the Province of British Columbia on July 19, 1995 and continued under the laws of the Yukon Territory on January 22, 2003. On May 27, 2005, Entrée Gold Inc. changed its governing jurisdiction from the Yukon Territory to British Columbia by continuing into British Columbia under the Business Corporations Act (British Columbia). The principal business activity of Entrée Gold Inc., together with its subsidiaries (collectively referred to as “the Company”), is the exploration of mineral property interests. To date, the Company has not generated significant revenues from its operations and is considered to be in the exploration stage.

 

All amounts are expressed in United States dollars, except for certain amounts denoted in Canadian dollars ("C$"), and Australian dollars ("A$"). 

 

These consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company currently earns no operating revenues. Continued operations of the Company are dependent upon the Company’s ability to secure additional equity capital or receive other financial support, and in the longer term to generate profits from business operations. Management believes that the Company has sufficient working capital to maintain its operations for the next 12 months.

2. BASIS OF PRESENTATION
Note 2. BASIS OF PRESENTATION

The interim period financial statements have been prepared by the Company in conformity with generally accepted accounting principles in the United States of America. The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of annual financial statements, and in the opinion of management these financial statements contain all adjustments necessary (consisting of normally recurring adjustments) to present fairly the financial information contained therein. Certain information and footnote disclosure normally included in the financial statements prepared in conformity with generally accepted accounting principles in the United States of America have been condensed or omitted. These interim period statements should be read together with the most recent audited financial statements and the accompanying notes for the year ended December 31, 2011. The results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012.

3. SIGNIFICANT ACCOUNTING POLICIES
Note 3. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements follow the same significant accounting principles as those outlined in the notes to the audited consolidated financial statements for the year ended December 31, 2011.

4. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Note 4. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash, cash equivalents and short-term investments consist of the following:

 

    June 30,     December 31,  
    2012     2011  
Cash at bank and in hand   $ 10,520,262     $ 10,579,061  
Cash equivalent investments     -       3,933,137  
Short-term investments     -       4,916,421  
    $ 10,520,262     $ 19,428,619  
5. LONG-TERM INVESTMENTS
Note 5. LONG-TERM INVESTMENTS

5. LONG-TERM INVESTMENTS

 

Equity Method Investment

 

The Company has a 20% interest in a joint venture with Oyu Tolgoi LLC (“OTLLC”), a company owned 66% by Turquoise Hill Resources Ltd. (formerly Ivanhoe Mines Ltd.) and 34% by the Government of Mongolia (Note 8). The Company’s share of the loss of the joint venture is $492,113 for the six months ended June 30, 2012 (June 30, 2011 - $1,289,608) plus accrued interest expense of $107,520 for the six months ended June 30, 2012 (June 30, 2011 - $59,970).

 

Asset Backed Commercial Paper

 

During the year ended December 31, 2011, the Company sold its asset backed notes (“AB Notes”) with a face value of C$4,007,068, and an expected maturity date of December 20, 2016, for gross cash proceeds of $2,560,687, net of taxes. The Company had designated the notes as available for sale and the notes were recorded at fair value using a discounted cash flow approach. The Company recorded a gain on sale of investments of $1,178,254 for the year ended December 31, 2011.

 

Australia Listed Equity Securities

 

During the year ended December 31, 2011, the Company sold its Australian listed securities for gross cash proceeds of $3,174,208, net of taxes. The Company recorded a gain on sale of investments of $2,148,021 for the year ended December 31, 2011.

6. EQUIPMENT
Note 6. EQUIPMENT

          June 30, 2012      December 31, 2011        
          Accumulated Net Book           Accumulated     Net Book  
    Cost     Depreciation Value     Cost     Depreciation     Value  
Office equipment   $ 125,407     $ 88,015 $ 37,392     $ 125,486     $ 83,346     $ 42,140  
Computer equipment     580,324       360,956   219,368       577,249       322,882       254,367  
Field equipment     553,728       272,207   281,521       568,984       246,363       322,621  
Buildings     421,597       296,612   124,985       422,468       286,750       135,718  
    $ 1,681,056     $ 1,017,790 $ 663,266     $ 1,694,187     $ 939,341     $ 754,846  

 

7. ACQUISITIONS
Note 7. ACQUISITIONS

The Company acquired all of the outstanding shares of PacMag Metals Limited (now PacMag Metals Pty Ltd) ("PacMag") on June 30, 2010, pursuant to a Scheme Implementation Deed dated November 28, 2009 and amended by a Deed of Variation dated April 12, 2010 with PacMag, by way of schemes of arrangement (the "Schemes") under the laws of Australia. The acquisition has been accounted for as an acquisition of the net assets of PacMag, rather than a business combination, as the net assets acquired did not represent a separate business transaction. For accounting purposes, the Company acquired control of PacMag on June 30, 2010 and these consolidated financial statements include the results of PacMag from June 30, 2010.

 

As consideration to former shareholders and option holders of PacMag, the Company issued 15,020,801 common shares valued at $28,325,101, paid $6,160,391 and incurred transaction costs of $1,282,789 for total consideration of $35,768,281.

 

The Company allocated the consideration to assets acquired and liabilities assumed as follows:

 

Cash   $ 837,263  
Receivables and deposits     174,440  
Investments     895,273  
Mineral property interests     47,979,966  
Equipment     1,488  
Accounts payable and accrued liabilities     (128,689 )
Deferred income tax liability     (13,991,460 )
    $ 35,768,281  

 

For the purposes of these consolidated financial statements, the purchase consideration has been allocated to the fair value of assets acquired and liabilities assumed, based on management’s best estimates and taking into account all available information at the time of acquisition as well as applicable information at the time these consolidated financial statements were prepared.

 

8. MINERAL PROPERTY INTERESTS
Note 8. MINERAL PROPERTY INTERESTS

Title to mineral property interests involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral property interests. The Company has investigated title to its mineral property interests and, to the best of its knowledge, title to the mineral property interests is in good standing.

 

Material Properties

 

The Company’s two principal assets are its interest in the Lookout Hill copper-gold property in Mongolia, and the Ann Mason copper-molybdenum project in Nevada.

 

Lookout Hill, Mongolia

 

The Lookout Hill property in the South Gobi region of Mongolia is comprised of two mining licences, Shivee Tolgoi and Javhlant, granted by the Mineral Resources Authority of Mongolia in October 2009. Title to the two licences is held by the Company.

 

In October 2004, the Company entered into an arm’s-length Equity Participation and Earn-In Agreement (the "Earn-In Agreement") with Ivanhoe Mines Ltd. (now Turquoise Hill Resources Ltd.) ("Turquoise Hill"). Under the Earn-In Agreement, Turquoise Hill agreed to purchase equity securities of the Company, and was granted the right to earn an interest in what is now the eastern portion of the Shivee Tolgoi mining licence and all of the Javhlant mining licence (together the "Joint Venture Property"). Most of Turquoise Hill’s rights and obligations under the Earn-In Agreement were subsequently assigned by Turquoise Hill to what was then its wholly-owned subsidiary, OTLLC. The Government of Mongolia subsequently acquired a 34% interest in OTLLC from Turquoise Hill.

 

On June 30, 2008, OTLLC gave notice that it had completed its earn-in obligations by expending a total of $35 million on exploration of the Joint Venture Property. OTLLC earned an 80% interest in all minerals extracted below a sub-surface depth of 560 metres from the Joint Venture Property and a 70% interest in all minerals extracted from surface to a depth of 560 metres from the Joint Venture Property. In accordance with the Earn-In Agreement, the Company and OTLLC formed a joint venture (the "Entrée-OTLLC Joint Venture") on terms annexed to the Earn-In Agreement.

 

The portion of the Shivee Tolgoi mining licence outside of the Joint Venture Property ("Shivee West") is 100% owned by the Company, but is subject to a first right of refusal by OTLLC.

 

The Shivee Tolgoi and Javhlant mining licences were each issued for a 30 year term and have rights of renewal for two further 20 year terms.

 

As of June 30, 2012, the Entrée-OTLLC Joint Venture had expended approximately $22.7 million to advance the Joint Venture Property. Under the terms of the Entrée-OTLLC Joint Venture, OTLLC contributed on behalf of the Company its required participation amount charging interest at prime plus 2% (Note 9).

 

Ann Mason, Nevada, United States

 

The Ann Mason Project is defined by a series of both unpatented lode claims on public land administered by the Bureau of Land Management, and patented lode claims. The Company assembled this package of claims through a combination of staking and a series of transactions undertaken since August 2009, including the acquisition of PacMag. The project area includes the Ann Mason copper-molybdenum porphyry deposit, the Blue Hill oxide target, and several early-stage copper porphyry targets including the Blackjack, Roulette and Minnesota targets. 

 

On August 26, 2010, the Company acquired 51% of Honey Badger Exploration Inc.’s ("Honey Badger") interest in unpatented lode claims formerly known as the Blackjack property after incurring expenditures of $900,000 on the property, issuing 37,500 common shares and reimbursing Honey Badger for up to $206,250 of expenditures previously incurred on the property. On July 27, 2011, the Company acquired Honey Badger’s remaining 49% interest in the Blackjack property, by issuing 550,000 common shares and paying $650,000 to Honey Badger. Certain of the claims are subject to an underlying mining lease and option to purchase agreement with two individuals. The underlying agreement provides for an option to purchase the claims for $500,000, a 3% net smelter returns ("NSR") royalty (which may be brought down to a 1% NSR royalty for $2 million) and annual advance minimum royalty payments of $27,500 which commenced in June 2011 and will continue until the commencement of sustained commercial production. The advance payments will be credited against future net smelter returns royalty payments.

 

In September 2009, the Company entered into an agreement with Bronco Creek Exploration Inc. ("Bronco Creek"), a wholly-owned subsidiary of Eurasian Minerals Inc. (together, "Eurasian Minerals"), whereby the Company may acquire an 80% interest in unpatented lode claims formerly known as the Roulette property. In order to acquire its interest, the Company must: (a) incur expenditures of $1,000,000, make cash payments of $140,000 and issue 85,000 common shares of the Company within three years; (b) make aggregate advance royalty payments totalling $375,000 between the fifth and tenth anniversaries of the agreement; and (c) deliver a bankable feasibility study before the tenth anniversary of the agreement. In accordance with the agreement, the Company has completed required exploration expenditures of $600,000, issued 85,000 shares and made payments totalling $140,000.

 

During the six months ended June 30, 2012, the Company, through a combination of staking and purchase agreements, acquired or entered into agreements to acquire certain lode claims within or contiguous to the boundaries of its Ann Mason Project pursuant to which the Company paid $2,121,170 and issued 40,000 common shares valued at $52,293. In order to complete the acquisition certain of these claims, the Company is required to pay an additional $1,500,000 by September 13, 2012.

 

Other Properties

 

During the six months ended June 30, 2012, the Company also had interests in non-material properties in Australia, United States, and Peru. Non-material properties include the following:

 

Australia Properties

 

The Company has a number of mineral property interests in Australia which it acquired in conjunction with the PacMag acquisition, including the Blue Rose joint venture and the Mystique farm-out. The Company holds a 51% interest in the Blue Rose copper-iron-gold-molybdenum joint venture property, with Giralia Resources Pty Ltd., now a subsidiary of Atlas Iron Limited (ASX:AGO) ("Atlas"), retaining the remaining 49% interest. The Company has a farm-out agreement with Black Fire Gold Pty Ltd, a wholly-owned subsidiary of Black Fire Minerals Limited (ASX:BFE – "Black Fire"), pursuant to which Black Fire can earn a 60% interest in the Mystique property by expending $1 million by September 2012 and a 75% interest by expending $2.5 million by September 2014. Black Fire can earn an additional 10% interest by sole funding a pre-feasibility study on the property.

 

The Company recorded a gain on sale of mineral property interests of $104,914 on the Northling property during the six months ended June 30, 2012 (June 30, 2011 – $125,916).

 

Empirical

 

During the six months ended June 30, 2012, the Company entered into an agreement with Empirical Discovery, LLC to purchase a 100% interest in the Lordsburg and Oak Grove properties, subject to a 2% NSR royalty, pursuant to which the Company paid $100,000 and issued 500,000 common shares valued at $326,483. Empirical has an option, until March 1, 2013, to reacquire the Oak Grove property for no consideration in the event that Entree does not complete a minimum amount of drilling prior to January 1, 2013.

 

 Capitalized mineral property acquisition costs are summarized as follows:

 

  June 30,   December 31,
  2012   2011
USA      
Ann Mason $ 52,884,485   $ 50,973,368
Empirical   967,269     532,550
Other   199,343     199,754
Total USA   54,051,097     51,705,672
           
AUSTRALIA          
Blue Rose JV   557,775     558,927
Mystique   413,311     414,164
Total Australia   971,086     973,091
           
Total all locations $ 55,022,183   $ 52,678,763

 

Exploration costs expensed are summarized as follows:

 

    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    June 30,     June 30,     June 30,     June 30,  
    2012     2011     2012     2011  
US   $ 1,677,194     $ 4,628,089     $ 4,546,825     $ 7,663,795  
Mongolia     652,279       1,009,271       1,219,800       1,508,566  
Other     72,611       60,784       251,446       173,445  
                                 
Total all locations   $ 2,402,084     $ 5,698,144     $ 6,018,071     $ 9,345,806  

 

9. LOANS PAYABLE
Note 9. LOANS PAYABLE

Under the terms of the Entrée-OTLLC Joint Venture (Note 8), OTLLC will contribute funds to approved joint venture programs and budgets on the Company’s behalf. Interest on each loan advance shall accrue at an annual rate equal to OTLLC’s actual cost of capital or the prime rate of the Royal Bank of Canada, plus two percent (2%) per annum, whichever is less, as at the date of the advance. The loans will be repayable by the Company monthly from ninety percent (90%) of the Company’s share of available cash flow from the Entrée-OTLLC Joint Venture. In the absence of available cash flow, the loans will not be repayable. The loans are not expected to be repaid within one year.

 

10. COMMON STOCK
Note 10. COMMON STOCK

Share issuances

 

In January 2012, the underwriters for the Company’s November 2011 marketed offering exercised their over allotment option pursuant to which the Company issued 1,150,000 common shares at a price of C$1.25 per share. Rio Tinto elected to exercise its pre-emptive rights and purchased an additional 170,455 shares at a price of C$1.25 per share. The total gross proceeds from the over allotment were $1,628,583. Related share issuance costs were $108,058.

 

In January 2012, the Company issued 40,000 shares at a fair value of $52,293 to acquire certain claims within or contiguous to the boundaries of its Ann Mason Project.

 

In June 2012, the Company issued 500,000 shares at a fair value of $326,483 to Empirical Discovery, LLC to purchase a 100% interest in the Lordsburg and Oak Grove properties.

 

Stock options

 

The Company has adopted a stock option plan (the "Plan") to grant options to directors, officers, employees and consultants. Under the Plan, as amended in May 2011, the Company may grant options to acquire up to 10% of the issued and outstanding shares of the Company. Options granted can have a term of up to ten years and an exercise price typically not less than the Company's closing stock price on the last trading day before the date of grant. Vesting is determined at the discretion of the Board of Directors.

 

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. For employees, the compensation expense is amortized on a straight-line basis over the requisite service period which approximates the vesting period. Compensation expense for stock options granted to non-employees is recognized over the contract services period or, if none exists, from the date of grant until the options vest. Compensation associated with unvested options granted to non-employees is re-measured on each balance sheet date using the Black-Scholes option pricing model.

 

The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model. The expected term of the options approximates the full term of the options. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The Company has not paid and does not anticipate paying dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. Companies are required to utilize an estimated forfeiture rate when calculating the expense for the reporting period. Based on the best estimate, management applied the estimated forfeiture rate of Nil in determining the expense recorded in the accompanying Statements of Operations.

 

Stock option transactions are summarized as follows:

 

           
          Weighted Average  
    Number of Options       Exercise Price (C$)
Balance at December 31, 2010     9,292,800       2.09  
Granted     575,000       2.77  
Exercised     (427,147 )     1.66  
Cancelled     (157,153 )     1.32  
Forfeited     (148,000 )     2.31  
Balance at December 31, 2011     9,135,500       2.16  
Granted     1,782,000       1.25  
Expired     (50,000 )     1.77  
Forfeited     (477,500 )     1.99  
Balance at March 31, 2012     10,390,000       2.02  
Granted     100,000       0.73  
Expired     (1,127,500 )     2.17  
Forfeited     (127,000 )     2.28  
Balance at June 30, 2012     9,235,500       1.98  

 

There were 1,882,000 stock options granted during the six months ended June 30, 2012 with a weighted average exercise price of C$1.22 and a weighted average fair value of C$0.60. The number of stock options exercisable at June 30, 2012 was 9,098,000.

 

At June 30, 2012, the following stock options were outstanding:

 

          Aggregate           Aggregate  
Number of     Exercise Price     Intrinsic Value       Number of Options     Intrinsic Value  
Options       (C$ )     (C$ ) Expiry Date   Exercisable       (C$ )
  1,292,500       2.00       -   April 3, 2013     1,292,500       -  
  12,500       1.55       -   May 21, 2013     12,500       -  
  37,500       2.02       -   July 17, 2013     37,500       -  
  1,032,000       1.55       -   September 17, 2013     1,032,000       -  
  5,000       1.55       -   October 10, 2013     5,000       -  
  1,289,000       1.32       -   February 12, 2014     1,289,000       -  
  1,472,500       2.60       -   December 29, 2014     1,472,500       -  
  300,000       2.34       -   September 22, 2015     300,000       -  
  1,372,500       2.86       -   November 22, 2015     1,372,500       -  
  200,000       3.47       -   January 4, 2016     200,000       -  
  125,000       2.94       -   March 8, 2016     125,000       -  
  150,000       2.05       -   July 7, 2016     112,500       -  
  100,000       2.23       -   July 15, 2016     75,000       -  
  1,697,000       1.25       -   January 6, 2017     1,697,000       -  
  50,000       1.27       -   January 18, 2014     25,000       -  
  100,000       0.73       -   June 17, 2018     50,000          
  9,235,500             $ -         9,098,000     $ -  

 

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of C$0.63 per share as of June 30, 2012, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of June 30, 2012 was Nil. The total intrinsic value of options exercised during the six months ended June 30, 2012 was $Nil (June 30, 2011 - $307,127).

 

Stock-based compensation

 

1,882,000 stock options were granted during the six months ended June 30, 2012. The fair value of stock options granted during the six months ended June 30, 2012 was $1,124,930 (June 30, 2011 - $671,037). 2,007,000 options fully vested during the six months ended June 30, 2012, 112,500 options will fully vest in 2012, and the remaining 25,000 options will fully vest in 2013. Stock-based compensation recognized during the six months ended June 30, 2012 was $1,190,487 (June 30, 2011 - $683,046) which has been recorded in the consolidated statements of operations as follows with corresponding additional paid-in capital recorded in stockholders' equity:

 

 

    Three Months Ended     Three Months Ended     Six Months Ended     Six Months Ended     Cumulative to  
    June 30,     June 30,     June 30,     June 30,     June 30,  
    2012     2011     2012     2011     2012  
Exploration   $ 8,902     $ -     $ 266,812     $ 47,421     $ 4,074,213  
General and administration     32,151       138,077       923,675       635,625       18,662,156  
    $ 41,053     $ 138,077     $ 1,190,487     $ 683,046     $ 22,736,369  

 

The following weighted-average assumptions were used for the Black-Scholes valuation of stock options granted:

 

    June 30,     December 31,  
    2012     2011  
Risk-free interest rate     1.13 %     2.06 %
Expected life of options (years)     4.9       4.2  
Annualized volatility     73 %     74 %
Dividend rate     0.00 %     0.00 %

 

11. SEGMENT INFORMATION
Note 11. SEGMENT INFORMATION

The Company operates in one business segment being the exploration of mineral property interests.

 

Geographic information is as follows:

 

    June 30,     December 31,  
    2012     2011  
Identifiable assets            
USA   $ 54,987,972     $ 52,424,129  
Canada     9,471,347       18,345,690  
Australia     1,940,464       1,993,279  
Mongolia     913,787       1,781,099  
Other     19,309       45,613  
    $ 67,332,879     $ 74,589,810  

 

 

12. FINANCIAL INSTRUMENTS
Note 12. FINANCIAL INSTRUMENTS

The Company's financial instruments generally consist of cash and cash equivalents, short-term investments, receivables, deposits, accounts payable and accrued liabilities and loans payable. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, except as noted below.

 

The Company is exposed to currency risk by incurring certain expenditures in currencies other than the Canadian dollar. The Company does not use derivative instruments to reduce this currency risk.

 

Fair value measurement is based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value which are:

 

Level 1 — Quoted prices that are available in active markets for identical assets or liabilities.

 

Level 2 — Quoted prices in active markets for similar assets that are observable.

 

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

At June 30, 2012, the Company had Level 1 financial instruments, consisting of cash, with a fair value of $10,520,262.

 

 

13. ACCUMULATED OTHER COMPREHENSIVE INCOME (OCI)
Note 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (OCI)

    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    June 30,     June 30,     June 30,     June 30,  
    2012     2011     2012     2011  
Accumulated OCI, beginning of period:                        
Currency translation adjustment   $ 3,046,822     $ 4,496,376     $ 1,901,351     $ 3,002,717  
Available for sale securities     -       3,358,932       -       2,747,997  
    $ 3,046,822     $ 7,855,308     $ 1,901,351     $ 5,750,714  
Other comprehensive income (loss) for the period:                                
Currency translation adjustments   $ (1,107,276 )   $ 472,699     $ 38,195     $ 1,966,358  
Unrealized gain on available for sale                                
investments     -       104,493       -       715,428  
Release of OCI on available for sale                                
investments     -       (2,174,356 )     -       (2,174,356 )
    $ (1,107,276 )   $ (1,597,164 )   $ 38,195     $ 507,430  
Accumulated OCI, end of period:                                
Currency translation adjustment   $ 1,939,546     $ 4,969,075     $ 1,939,546     $ 4,969,075  
Available for sale securities     -       1,289,069       -       1,289,069  
    $ 1,939,546     $ 6,258,144     $ 1,939,546     $ 6,258,144  

 

14. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
Note 14. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

The significant non-cash transactions for the six months ended June 30, 2012 consisted of the following items:

 

·   issuance of 540,000 common shares (June 30, 2011 – 40,000) in payment of mineral property acquisitions valued at $378,776 (June 30, 2011 – $122,189) which have been capitalized as mineral property interests.

 

·   funding by OTLLC of the Company’s investment requirements for the Entrée-OTLLC Joint Venture of $492,113 (June 30, 3011 – $1,289,608).

 

 

15. COMMITMENTS
Note 15. COMMITMENTS

The Company is committed to make lease payments for the rental of office space as follows:

 

2012   $ 155,558  
2013     209,511  
2014     206,180  
2015     209,987  
2016     212,706  
2017     88,628  
    $ 1,082,570  

 

The Company incurred lease expense of $184,139 (June 30, 2011 – $170,156) for the six months ended June 30, 2012.

 

 

17. SUBSEQUENT EVENTS
Note 17. SUBSEQUENT EVENTS

Subsequent to June 30, 2012, Entree entered into an agreement to acquire a 100% interest in certain patented lode claims within the boundaries of the Ann Mason Project for $100,000 and a 2% NSR royalty on the claims. The agreement is expected to complete in the third quarter of 2012.

3. SIGNIFICANT ACCOUNTING POLICIES (Policies)
SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements follow the same significant accounting principles as those outlined in the notes to the audited consolidated financial statements for the year ended December 31, 2011.

4. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables)
Cash, cash equivalents and short-term investments

Cash, cash equivalents and short-term investments consist of the following:

 

    June 30,     December 31,  
    2012     2011  
Cash at bank and in hand   $ 10,520,262     $ 10,579,061  
Cash equivalent investments     -       3,933,137  
Short-term investments     -       4,916,421  
    $ 10,520,262     $ 19,428,619  
6. EQUIPMENT (Tables)
Equipment

          June 30 , 2012     December 31, 2011        
          Accumulated Net Book           Accumulated     Net Book  
    Cost     Depreciation Value     Cost     Depreciation     Value  
Office equipment   $ 125,407     $ 88,015 $ 37,392     $ 125,486     $ 83,346     $ 42,140  
Computer equipment     580,324       360,956   219,368       577,249       322,882       254,367  
Field equipment     553,728       272,207   281,521       568,984       246,363       322,621  
Buildings     421,597       296,612   124,985       422,468       286,750       135,718  
    $ 1,681,056     $ 1,017,790 $ 663,266     $ 1,694,187     $ 939,341     $ 754,846  

 

7. ACQUISTIONS (Tables)
ACQUISTIONS

The Company allocated the consideration to assets acquired and liabilities assumed as follows:

 

Cash   $ 837,263  
Receivables and deposits     174,440  
Investments     895,273  
Mineral property interests     47,979,966  
Equipment     1,488  
Accounts payable and accrued liabilities     (128,689 )
Deferred income tax liability     (13,991,460 )
    $ 35,768,281  

 

8. MINERAL PROPERTY INTERESTS (Tables)
Capitalized mineral property acquisition costs

 Capitalized mineral property acquisition costs are summarized as follows:

 

  June 30,   December 31,
  2012   2011
USA      
Ann Mason $ 52,884,485   $ 50,973,368
Empirical   967,269     532,550
Other   199,343     199,754
Total USA   54,051,097     51,705,672
           
AUSTRALIA          
Blue Rose JV   557,775     558,927
Mystique   413,311     414,164
Total Australia   971,086     973,091
           
Total all locations $ 55,022,183   $ 52,678,763

 

Exploration costs expensed are summarized as follows:

 

    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    June 30,     June 30,     June 30,     June 30,  
    2012     2011     2012     2011  
US   $ 1,677,194     $ 4,628,089     $ 4,546,825     $ 7,663,795  
Mongolia     652,279       1,009,271       1,219,800       1,508,566  
Other     72,611       60,784       251,446       173,445  
                                 
Total all locations   $ 2,402,084     $ 5,698,144     $ 6,018,071     $ 9,345,806  
10. COMMON STOCK (Tables)
Stock option transactions

Stock option transactions are summarized as follows:

 

           
          Weighted Average  
    Number of Options       Exercise Price (C$)
Balance at December 31, 2010     9,292,800       2.09  
Granted     575,000       2.77  
Exercised     (427,147 )     1.66  
Cancelled     (157,153 )     1.32  
Forfeited     (148,000 )     2.31  
Balance at December 31, 2011     9,135,500       2.16  
Granted     1,782,000       1.25  
Expired     (50,000 )     1.77  
Forfeited     (477,500 )     1.99  
Balance at March 31, 2012     10,390,000       2.02  
Granted     100,000       0.73  
Expired     (1,127,500 )     2.17  
Forfeited     (127,000 )     2.28  
Balance at June 30, 2012     9,235,500       1.98  

 

At June 30, 2012, the following stock options were outstanding:

 

          Aggregate           Aggregate  
Number of     Exercise Price     Intrinsic Value       Number of Options     Intrinsic Value  
Options       (C$ )     (C$ ) Expiry Date   Exercisable       (C$ )
  1,292,500       2.00       -   April 3, 2013     1,292,500       -  
  12,500       1.55       -   May 21, 2013     12,500       -  
  37,500       2.02       -   July 17, 2013     37,500       -  
  1,032,000       1.55       -   September 17, 2013     1,032,000       -  
  5,000       1.55       -   October 10, 2013     5,000       -  
  1,289,000       1.32       -   February 12, 2014     1,289,000       -  
  1,472,500       2.60       -   December 29, 2014     1,472,500       -  
  300,000       2.34       -   September 22, 2015     300,000       -  
  1,372,500       2.86       -   November 22, 2015     1,372,500       -  
  200,000       3.47       -   January 4, 2016     200,000       -  
  125,000       2.94       -   March 8, 2016     125,000       -  
  150,000       2.05       -   July 7, 2016     112,500       -  
  100,000       2.23       -   July 15, 2016     75,000       -  
  1,697,000       1.25       -   January 6, 2017     1,697,000       -  
  50,000       1.27       -   January 18, 2014     25,000       -  
  100,000       0.73       -   June 17, 2018     50,000          
  9,235,500             $ -         9,098,000     $ -  

 

 

 

    Three Months Ended     Three Months Ended     Six Months Ended     Six Months Ended     Cumulative to  
    June 30,     June 30,     June 30,     June 30,     June 30,  
    2012     2011     2012     2011     2012  
Exploration   $ 8,902     $ -     $ 266,812     $ 47,421     $ 4,074,213  
General and administration     32,151       138,077       923,675       635,625       18,662,156  
    $ 41,053     $ 138,077     $ 1,190,487     $ 683,046     $ 22,736,369  

 

The following weighted-average assumptions were used for the Black-Scholes valuation of stock options granted:

 

    June 30,     December 31,  
    2012     2011  
Risk-free interest rate     1.13 %     2.06 %
Expected life of options (years)     4.9       4.2  
Annualized volatility     73 %     74 %
Dividend rate     0.00 %     0.00 %

 

11. SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION

Geographic information is as follows:

 

    June 30,     December 31,  
    2012     2011  
Identifiable assets            
USA   $ 54,987,972     $ 52,424,129  
Canada     9,471,347       18,345,690  
Australia     1,940,464       1,993,279  
Mongolia     913,787       1,781,099  
Other     19,309       45,613  
    $ 67,332,879     $ 74,589,810  

 

 

13. ACCUMULATED OTHER COMPREHENSIVE INCOME (OCI) (Tables)
ACCUMULATED OTHER COMPREHENSIVE INCOME

    Three Months     Three Months     Six Months     Six Months  
    Ended     Ended     Ended     Ended  
    June 30,     June 30,     June 30,     June 30,  
    2012     2011     2012     2011  
Accumulated OCI, beginning of period:                        
Currency translation adjustment   $ 3,046,822     $ 4,496,376     $ 1,901,351     $ 3,002,717  
Available for sale securities     -       3,358,932       -       2,747,997  
    $ 3,046,822     $ 7,855,308     $ 1,901,351     $ 5,750,714  
Other comprehensive income (loss) for the period:                                
Currency translation adjustments   $ (1,107,276 )   $ 472,699     $ 38,195     $ 1,966,358  
Unrealized gain on available for sale                                
investments     -       104,493       -       715,428  
Release of OCI on available for sale                                
investments     -       (2,174,356 )     -       (2,174,356 )
    $ (1,107,276 )   $ (1,597,164 )   $ 38,195     $ 507,430  
Accumulated OCI, end of period:                                
Currency translation adjustment   $ 1,939,546     $ 4,969,075     $ 1,939,546     $ 4,969,075  
Available for sale securities     -       1,289,069       -       1,289,069  
    $ 1,939,546     $ 6,258,144     $ 1,939,546     $ 6,258,144  

 

15. COMMITMENTS (Tables)
Lease payments

The Company is committed to make lease payments for the rental of office space as follows:

 

2012   $ 155,558  
2013     209,511  
2014     206,180  
2015     209,987  
2016     212,706  
2017     88,628  
    $ 1,082,570  
4. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
 
 
Cash at bank and in hand
$ 10,520,262 
$ 10,579,061 
Cash equivalent investments
3,933,137 
Short-term investments
4,916,421 
Total cash and cash equivalents
$ 10,520,262 
$ 19,428,619 
5. LONG-TERM INVESTMENTS (Details Narrative) (USD $)
6 Months Ended 12 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
LONG-TERM INVESTMENTS
 
 
 
Loss in joint venture
$ 492,113 
$ 1,289,608 
 
Accrued interest expense
107,520 
59,970 
 
Asset Backed Notes Face Value
 
 
4,007,068 
AB Notes Maturity
 
 
Dec. 20, 2016 
AB Notes Gross proceeds net of tax
 
 
2,560,687 
AB Notes Gain on sale of Investment
 
 
1,178,254 
Australian listed securities sold, Gross
 
 
3,174,208 
Australian listed securities Gain on Sale of Investments
 
 
$ 2,148,021 
6. EQUIPMENT (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
PropertyPlant and Equipment
 
 
Cost
$ 1,681,056 
$ 1,694,187 
Accumulated Depreciation
1,017,790 
939,341 
Net Book Value
663,266 
754,846 
OfficeEquipmentMember
 
 
PropertyPlant and Equipment
 
 
Cost
125,407 
125,486 
Accumulated Depreciation
88,015 
83,346 
Net Book Value
37,392 
42,140 
ComputerEquipmentMember
 
 
PropertyPlant and Equipment
 
 
Cost
580,324 
577,249 
Accumulated Depreciation
360,956 
322,882 
Net Book Value
219,368 
254,367 
FieldEquipmentMember
 
 
PropertyPlant and Equipment
 
 
Cost
553,728 
568,984 
Accumulated Depreciation
272,207 
246,363 
Net Book Value
281,521 
322,621 
BuildingMember
 
 
PropertyPlant and Equipment
 
 
Cost
421,597 
422,468 
Accumulated Depreciation
296,612 
286,750 
Net Book Value
$ 124,985 
$ 135,718 
7. ACQUISTIONS (Details) (USD $)
Jun. 30, 2012
ACQUISTIONS
 
Cash
$ 837,263 
Receivables and deposits
174,440 
Investments
895,273 
Mineral property interests
47,979,966 
Equipment
1,488 
Accounts payable and accrued liabilities
(128,689)
Deferred income tax liability
(13,991,460)
Total Cost Allocation
$ 35,768,281 
7. ACQUISITIONS (Details Narrative) (USD $)
Jun. 30, 2012
ACQUISITIONS
 
Transaction costs for acquisition
$ 1,282,789 
Total consideration
$ 35,768,281 
8. MINERAL PROPERTY INTERESTS (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
$ 55,022,183 
$ 52,678,763 
USAMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
54,051,097 
51,705,672 
USAMember |
AnnMasonMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
52,884,485 
50,973,368 
USAMember |
EmpiricalMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
967,269 
532,550 
USAMember |
OtherCountryMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
199,343 
199,754 
AustraliaMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
971,086 
973,091 
AustraliaMember |
BlueRoseJVMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
557,775 
558,927 
AustraliaMember |
MystiqueMember
 
 
PaymentsToAcquireMineralRightsLineItems [Line Items]
 
 
Capitalized mineral property acquisition Cost
$ 413,311 
$ 414,164 
8. MINERAL PROPERTY INTERESTS (Details 1) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
ExplorationCostsLineItems [Line Items]
 
 
 
 
Exploration costs
$ 2,402,084 
$ 5,698,144 
$ 6,018,071 
$ 9,345,806 
USMember
 
 
 
 
ExplorationCostsLineItems [Line Items]
 
 
 
 
Exploration costs
1,677,194 
4,628,089 
4,546,825 
7,663,795 
MongoliaMember
 
 
 
 
ExplorationCostsLineItems [Line Items]
 
 
 
 
Exploration costs
652,279 
1,009,271 
1,219,800 
1,508,566 
OtherCountryMember
 
 
 
 
ExplorationCostsLineItems [Line Items]
 
 
 
 
Exploration costs
$ 72,611 
$ 60,784 
$ 251,466 
$ 173,445 
8. MINERAL PROPERTY INTERESTS (Details Narrative) (USD $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
ScheduleOfMineralPropertyInterestsLineItems [Line Items]
 
 
Cost of exploration
$ 22,700,000 
 
AnnMasonNevadaUnitedStatesMember
 
 
ScheduleOfMineralPropertyInterestsLineItems [Line Items]
 
 
Cost of exploration
2,121,170 
 
Share issued for acquisition
40,000 
 
Share issued for acquisition, value
52,293 
 
NorthlingPropertyMember
 
 
ScheduleOfMineralPropertyInterestsLineItems [Line Items]
 
 
Gain on sale of mineral property interests
104,914 
125,916 
LordsburgAndOakGrovePropertyMember
 
 
ScheduleOfMineralPropertyInterestsLineItems [Line Items]
 
 
Ownership percentage
100.00% 
 
Cost of exploration
100,000 
 
Share issued for acquisition
500,000 
 
Share issued for acquisition, value
$ 326,483 
 
Net smelter returns for options to purchase the claim
2.00% 
 
10. COMMON STOCK (Details) (USD $)
3 Months Ended 12 Months Ended
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Number of option
 
 
 
Beginning Balance
10,390,000 
9,135,500 
9,292,800 
Granted
100,000 
1,782,000 
575,000 
Exercised
(427,147)
Cancelled
(157,153)
Expired
(1,127,500)
(50,000)
   
Forfeited
(127,000)
(477,500)
(148,000)
Ending Balance
9,235,500 
10,390,000 
9,135,500 
Weighted Average Exercise Price
 
 
 
Beginning Balance
$ 2.02 
$ 2.16 
$ 2.09 
Granted
$ 0.73 
$ 1.25 
$ 2.77 
Exercised
   
   
$ 1.66 
Cancelled
   
   
$ 1.32 
Expired
$ 2.17 
$ 1.77 
   
Forfeited
$ 2.28 
$ 1.99 
$ 2.31 
Ending Balance
$ 1.98 
$ 2.02 
$ 2.16 
10. COMMON STOCK (Details 1) (USD $)
Jun. 30, 2012
Option Outstanding
 
Number of Shares
9,235,500 
Aggregate Intrinsic Value, (C$)
   
Option Exercisable
 
Number of Shares
9,098,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionOneMember
 
Option Outstanding
 
Number of Shares
1,292,500 
Exercise Price, ($C)
$ 2 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Apr. 03, 2013 
Option Exercisable
 
Number of Shares
1,292,500 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionTwoMember
 
Option Outstanding
 
Number of Shares
12,500 
Exercise Price, ($C)
$ 1.55 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
May 21, 2013 
Option Exercisable
 
Number of Shares
12,500 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionThreeMember
 
Option Outstanding
 
Number of Shares
37,500 
Exercise Price, ($C)
$ 2.02 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jul. 17, 2013 
Option Exercisable
 
Number of Shares
37,500 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionFourMember
 
Option Outstanding
 
Number of Shares
1,032,000 
Exercise Price, ($C)
$ 1.55 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Sep. 17, 2013 
Option Exercisable
 
Number of Shares
1,032,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionFiveMember
 
Option Outstanding
 
Number of Shares
5,000 
Exercise Price, ($C)
$ 1.55 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Oct. 10, 2013 
Option Exercisable
 
Number of Shares
5,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionSixMember
 
Option Outstanding
 
Number of Shares
1,289,000 
Exercise Price, ($C)
$ 1.32 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Feb. 12, 2014 
Option Exercisable
 
Number of Shares
1,289,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionSevenMember
 
Option Outstanding
 
Number of Shares
1,472,500 
Exercise Price, ($C)
$ 2.6 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Dec. 29, 2014 
Option Exercisable
 
Number of Shares
1,472,500 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionEightMember
 
Option Outstanding
 
Number of Shares
300,000 
Exercise Price, ($C)
$ 2.34 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Sep. 22, 2015 
Option Exercisable
 
Number of Shares
300,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionNineMember
 
Option Outstanding
 
Number of Shares
1,372,500 
Exercise Price, ($C)
$ 2.86 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Nov. 22, 2015 
Option Exercisable
 
Number of Shares
1,372,500 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionTenMember
 
Option Outstanding
 
Number of Shares
200,000 
Exercise Price, ($C)
$ 3.47 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jan. 04, 2016 
Option Exercisable
 
Number of Shares
200,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionElevenMember
 
Option Outstanding
 
Number of Shares
125,000 
Exercise Price, ($C)
$ 2.94 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Mar. 08, 2016 
Option Exercisable
 
Number of Shares
125,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionTwelveMember
 
Option Outstanding
 
Number of Shares
150,000 
Exercise Price, ($C)
$ 2.05 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jul. 07, 2016 
Option Exercisable
 
Number of Shares
112,500 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionThirteenMember
 
Option Outstanding
 
Number of Shares
100,000 
Exercise Price, ($C)
$ 2.23 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jul. 15, 2016 
Option Exercisable
 
Number of Shares
75,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionFourteenMember
 
Option Outstanding
 
Number of Shares
1,697,000 
Exercise Price, ($C)
$ 1.25 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jan. 06, 2017 
Option Exercisable
 
Number of Shares
1,697,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionFifteenMember
 
Option Outstanding
 
Number of Shares
50,000 
Exercise Price, ($C)
$ 1.27 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jan. 18, 2014 
Option Exercisable
 
Number of Shares
25,000 
Aggregate Intrinsic Value ($C)
   
ShareBasedCompensationStockOptionSixteenMember
 
Option Outstanding
 
Number of Shares
100,000 
Exercise Price, ($C)
$ 0.73 
Aggregate Intrinsic Value, (C$)
   
Expiry Date
Jun. 18, 2017 
Option Exercisable
 
Number of Shares
50,000 
10. COMMON STOCK (Details 2) (USD $)
3 Months Ended 6 Months Ended 203 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Stock-based compensation
 
 
 
 
 
Exploration
$ 8,902 
    
$ 266,812 
$ 47,421 
$ 4,074,213 
General and administration
32,151 
138,077 
923,675 
635,625 
18,662,156 
Total Stock-based compensation
$ 41,053 
$ 138,077 
$ 1,190,487 
$ 683,046 
$ 22,736,369 
10. COMMON STOCK (Details 3)
6 Months Ended 12 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Black-Scholes valuation of stock options granted
 
 
Risk-free interest rate
1.13% 
2.06% 
Expected life of options (years)
4 years 10 months 24 days 
4 years 2 months 12 days 
Annualized volatility
73.00% 
74.00% 
Dividend rate
0.00% 
0.00% 
10. COMMON STOCK (Details Narrative) (USD $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Stock Options
 
 
Stock options granted
1,882,000 
 
Weighted average exercise price, (C$)
$ 1.22 
 
Weighted average fair value, (C$)
$ 0.6 
 
Stock options exercisable
9,098,000 
 
Closing stock price, (C$)
$ 0.63 
 
In-the-money options vested and exercisable
 
Intrinsic value of options exercised
$ 0 
 
Stock-based compensation
 
 
Stock option Granted
1,882,000 
 
Fair value of stock options granted
$ 1,124,930 
$ 671,037 
Options Vested
2,007,000 
 
Unvested options will fully vest
112,500 
 
Stock-based compensation
$ 1,190,487 
$ 683,046 
11. SEGMENT INFORMATION (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
SEGMENT INFORMATION
 
 
Identifiable Assets
$ 67,332,879 
$ 74,589,810 
USAMember
 
 
SEGMENT INFORMATION
 
 
Identifiable Assets
54,987,972 
52,424,129 
CanadaMember
 
 
SEGMENT INFORMATION
 
 
Identifiable Assets
9,471,347 
18,345,690 
AustraliaMember
 
 
SEGMENT INFORMATION
 
 
Identifiable Assets
1,940,464 
1,993,279 
MongoliaMember
 
 
SEGMENT INFORMATION
 
 
Identifiable Assets
913,787 
1,781,099 
OtherCountryMember
 
 
SEGMENT INFORMATION
 
 
Identifiable Assets
$ 19,309 
$ 45,613 
12. FINANCIAL INSTRUMENTS (Details Narrative) (USD $)
Jun. 30, 2012
Dec. 31, 2011
Financial Instruments Details Narrative
 
 
Cash and cash equivalents
$ 10,520,262 
$ 14,512,198 
13. ACCUMULATED OTHER COMPREHENSIVE INCOME (OCI) (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Accumulated Other Comprehensive Income Oci Details
 
 
 
 
Currency translation adjustment
$ 3,046,822 
$ 4,496,376 
$ 1,901,351 
$ 3,002,717 
Available for sale securities
3,358,932 
2,747,997 
Total Accumulated OCI, beginning of period
3,046,822 
7,855,308 
1,901,351 
5,750,714 
Currency translation adjustments
(1,107,276)
472,699 
38,195 
1,966,358 
Unrealized gain on available for sale investments
104,493 
715,428 
Release of OCI on available for sale investments
(2,174,356)
(2,174,356)
Total Other comprehensive income (loss) for the period
(1,107,276)
(1,597,164)
38,195 
507,430 
Currency translation adjustment
1,939,546 
4,969,075 
1,939,546 
4,969,075 
Available for sale securities
1,289,069 
1,289,069 
Total Accumulated OCI, end of period
$ 1,939,546 
$ 6,258,144 
$ 1,939,546 
$ 6,258,144 
14. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (Details Narrative) (USD $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Supplemental Disclosure With Respect To Cash Flows Details Narrative
 
 
Issuance of common shares for mineral property acquisitions
540,000 
40,000 
Value of shares issued for mineral property acquisitions
$ 378,776 
$ 122,189 
OTLLC Investments
$ 492,113 
$ 1,289,608 
15. COMMITMENTS (Details) (USD $)
Jun. 30, 2012
COMMITMENTS
 
2012
$ 155,558 
2013
209,511 
2014
206,180 
2015
209,987 
2016
212,706 
2017
88,628 
Total
$ 1,082,570 
15. COMMITMENTS (Details Narrative) (USD $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Commitments Details
 
 
Lease expense
$ 184,139 
$ 170,156 
17. SUBSQUENT EVENTS (Details Narrative) (USD $)
Jun. 30, 2012
Subsquent Events Details Narrative
 
Acquire 100% interest in certain patented lode claims within the boundaries of Ann Mason Project
$ 100,000 
NSR royalty on Ann Mason claims
2.00%