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The fair value of the exploration property is determined based upon the cost basis the of the Company&#8217;s investment in the exploration property under U.S. GAAP. There was no change in the carrying valuation of the exploration property during the six months ended March 31, 2017.</div> <div><br /> </div> <div style="font: 10pt Times New Roman, Times, serif; text-align: left; text-indent: 36pt">Complex derivative instrument liabilities utilize a Monte Carlo model to estimate their fair value. As set forth in the Statement of Financial Accounting Standard No. 820-10-35-37 <font style="font: italic 10pt Times New Roman, Times, serif">Fair Value in Financial Instruments </font>to increase consistency, a fair value hierarchy was developed to rank the reliability of inputs that reflect assumptions, used as a basis for determining fair value. The ASC 820 accounting standard requires companies use actual market data, when available or models, when unavailable. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available, except when it might not represent fair value at the measurement date. When using models, ASC 820 provides guidance on appropriate valuation techniques and addresses the inherent valuation issue of risk. A two-step approach is used in determining whether an instrument or embedded feature is indexed to an entity&#8217;s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. Fair Value relied on a &#8220;value in use&#8221; or &#8220;going concern&#8221; premise. To properly apply this fair value standard, we gave consideration to the Holder&#8217;s intentions regarding whether or not the Securities purchased were to be held, sold, or abandoned. Our analysis also reflects assumptions that would be made by market participants if these market participants were to buy or sell each identified asset on an individual basis<font style="font: 10pt Times New Roman, Times, serif">. The </font>Monte Carlo model that values the Convertible Note and Warrant based on average discounted cash flow of 500,000 iterations factoring in the various potential outcomes. The derivative instrument liabilities on the convertible note and warrants at March 31, 2017 were $46,559 and $265,094, respectively.</div></div> 200000 400000 200000 150000 200000 236755 2500000 21211 10000000 6115 3150719 882352 P3Y 0.50 16011 102426 55578 16120 6027 5940 823 5000000 5000000 2020-02-21 0.0999 0.85 0.10 0.10 50000 0.05 0.10 25000000