EL CAPITAN PRECIOUS METALS INC (Form: 10-Q, Received: 05/14/2014 11:14:25)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended March 31, 2014

¨		TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 333-56262

(Exact name of registrant as specified in its charter)

Nevada		88-0482413
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

8390 Via de Ventura, Suite F-110, #215

Scottsdale, AZ

85258

(Address of principal executive offices)

(Zip Code)

(928) 515-1942

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

	Large accelerated filer ¨	Accelerated filer ¨
	Non-accelerated filer ¨	Smaller reporting company þ
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ¨ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 275,769,643 shares of common stock, par value $0.001, of the issuer were issued and outstanding as of May 14, 2014.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

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		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Consolidated Balance Sheets – March 31, 2014 and September 30, 2013 (Unaudited)	3
	Consolidated Statements of Expenses – Three and six months ended March 31, 2014 and 2013 and for the period from July 26, 2002 (inception) through March 31, 2014 (Unaudited)	4
	Consolidated Statement of Stockholders’ Equity – September 30, 2012 through March 31, 2014 (Unaudited)	5
	Consolidated Statements of Cash Flows – Six months ended March 31, 2014 and 2013 and for the period from July 26, 2002 (inception) through March 31, 2014 (Unaudited)	6
	Notes to the Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	22

SIGNATURES		24

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P ART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			September 30,
	2014			2013
ASSETS

CURRENT ASSETS:
Cash	$	51,906		$	373,692
Prepaid expenses and other current assets		90,436			78,526
Deferred costs		—			120,476
Total Current Assets		142,342			572,694

Furniture and equipment net of accumulated depreciation of $33,412 and $33,102, respectively		620			930
Mineral property		1,879,608			1,879,608
Deposits		1,022,440			22,440
Total Assets	$	3,045,010		$	2,475,672

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	136,424		$	114,877
Accrued liabilities		60,450			40,400
Short term note payable		3,488			—
Total Current Liabilities		200,362			155,277

Equipment note payable		400,000			—
Total Liabilities		600,362			155,277

STOCKHOLDERS’ EQUITY:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value; 300,000,000 shares authorized; 273,230,781 and 262,604,345 issued and outstanding, respectively		273,231			262,604
Additional paid-in capital		205,989,832			203,879,146
Deficit accumulated during the exploration stage		(203,818,415	)		(201,821,355	)
Total Stockholders’ Equity		2,444,648			2,320,395
Total Liabilities and Stockholders’ Equity	$	3,045,010		$	2,475,672

T he accompanying notes are an integral part of these unaudited consolidated financial statements.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF EXPENSES

(Unaudited)

	Three Months Ended March 31,						Six Months Ended March 31,						July 26, 2002 (Inception) Through March 31,
	2014			2013			2014			2013			2014

OPERATING EXPENSES:
Professional fees	$	83,869		$	49,849		$	230,013		$	110,997		$	4,301,069
Officer compensation expense		—			—			—			—			2,863,833
Administrative consulting fees		65,000			55,000			130,000			105,000			2,770,766
Management fees, related party		—			—			—			—			320,500
Legal and accounting fees		62,347			26,850			85,494			86,507			2,112,913
Exploration expenses		869,041			237,960			1,053,593			341,058			5,271,295
Other general and administrative		271,592			337,075			496,182			476,619			8,087,409
Write-off of accounts payable and accrued interest		—			—			—			—			(63,364	)
Loss on impairment of mineral property		—			—			—			—			176,567,424
Loss on asset dispositions		—			—			—			—			33,170
Total Operating Expenses		1,351,849			706,734			1,995,282			1,120,181			202,265,015

LOSS FROM OPERATIONS		(1,351,849	)		(706,734	)		(1,995,282	)		(1,120,181	)		(202.265,015	)

OTHER INCOME (EXPENSE):
Interest income		14			70			73			145			39,784
Other income		—			—			—			—			18,632
Forgiveness of debt		—			—			—			—			115,214
Interest expense:
Related parties		—			—			—			—			(68,806	)
Other		(1,764	)		—			(1,851	)		—			(310,591	)
Loss on extinguishment of liabilities		—			—			—			—			(222,748	)
Gain on derivative instrument liability		—			—			—			—			7,203
Accretion of notes payable discounts		—			—			—			—			(1,132,088	)
Total Other Income (Expense)		(1,750	)		70			(1,778	)		145			(1,553,400	)

NET LOSS	$	(1,353,599	)	$	(706,664	)	$	(1,997,060	)	$	(1,120,036	)	$	(203,818,415	)

Net loss per common share, basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00	)

Weighted average number of common shares outstanding, basic and diluted		268,880,930			254,261,386			267,022,484			253,296,111

T he accompanying notes are an integral part of these unaudited consolidated financial statements.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

September 30, 2012 through March 31, 2014

(Unaudited)

	Common Stock Shares		Common Stock Amount		Additional Paid-in Capital		Deficit Accumulated During the Exploration Stage			Total

Balances at September 30, 2012		251,327,040	$	251,328	$	201,903,913	$	(200,078,743	)	$	2,076,498
Common stock granted for deferred costs		—		—		20,476		—			20,476
Common stock issued for services		60,000		60		15,690		—			15,750
Costs associated with options		—		—		400,283		—			400,283
Sales of common stock		11,217,305		11,216		1,538,784		—			1,550,000
Net loss		—		—		—		(1,742,612	)		(1,742,612	)
Balances at September 30, 2013		262,604,345		262,604		203,879,146		(201,821,355	)		2,320,395
Common stock issued for services		4,350,000		4,350		845,275		—			849,625
Common stock issued for equipment deposit		2,500,000		2,500		497,500		—			500,000
Costs associated with options		—		—		470,664		—			470,664
Options exercised		100,000		100		21,400		—			21,500
Reversal of deferred costs		—		—		(20,476)		—			(20,476	)
Sales of common stock		3,676,436		3,677		296,323		—			300,000
Net loss		—		—		—		(1,997,060	)		(1,997,060	)
Balances at March 31, 2014		273,230,781	$	273,231	$	205,989,832	$	(203,818,415	)	$	2,444,648

T he accompanying notes are an integral part of these unaudited consolidated financial statements.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended March 31,						July 26, 2002 (Inception) Through March 31,
	2014			2013			2014

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,997,060	)	$	(1,120,036	)	$	(203,818,415	)
Adjustments to reconcile net loss to net cash used in operating activities:
Warrant and option associated costs		470,664			377,564			6,022,504
Beneficial conversion feature of notes payable		—			—			225,207
Non-cash expense with affiliate		—			—			7,801
Stock-based compensation		849,625			15,750			7,589,908
Non-cash merger related costs		—			—			1
Accretion of discounts on notes payable		—			—			1,132,088
Loss on sale of fixed assets		—			—			33,170
Gain on derivative instruments liability		—			—			(7,203	)
Loss on impairment of mineral property		—			—			176,567,424
Write-off accounts payable and accrued interest		—			—			(63,364	)
Forgiveness of debt		—			—			(115,214	)
Gain on conversion of debt		—			—			(2,459	)
Provision for uncollectible note receivable		—			—			62,500
Non-cash litigation settlement		—			—			214,642
Depreciation		310			1,113			84,543
Changes in operating assets and liabilities:
Miscellaneous receivable		—			—			4,863
Interest receivable		—			—			(13,611	)
Prepaid expenses and other current assets		(11,910	)		17,998			(87,146	)
Advances on behalf of affiliated company		—			—			(562,990	)
Deferred costs		100,000			—			–
Accounts payable		21,547			2,899			145,844
Accounts payable - related party		—			—			364
Accrued liabilities		20,050			(12,900	)		280,756
Interest payable, other		—			—			49,750
Net Cash Used in Operating Activities		(546,774	)		(717,612	)		(12,249,037	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property interest		—			—			(100,000	)
Purchase of furniture and equipment		—			—			(150,600	)
Proceeds from sale of fixed assets		—			—			32,001
Cash paid for equipment deposit		(100,000	)		—			(122,440	)
Issuance of notes receivable		—			—			(249,430	)
Payments received on notes receivable		—			—			129,450

(Continued)

T he accompanying notes are an integral part of these unaudited consolidated financial statements.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	Six Months Ended March 31,					July 26, 2002 (Inception) Through March 31,
	2014			2013		2014

CASH FLOWS FROM INVESTING ACTIVITIES (Continued):
Cash received in acquisition of Gold and Minerals Company, Inc.		—			—		89,902
Costs associated with acquisition share issuance		—			—		(32,324	)
Cash paid in connection with acquisition of DML Services, Inc.		—			—		(50,000	)
Net Cash Used in Investing Activities		(100,000	)		—		(453,441	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock and subscriptions		300,000			750,000		8,761,591
Costs associated with the sale of stock		—			—		(19,363	)
Proceeds from notes payable, related parties		—			—		219,900
Proceeds from warrant exercise		21,500			—		1,572,242
Proceeds from notes payable, other		—			—		2,322,300
Increase in finance contracts		17,439			—		134,918
Repayment of notes payable, related parties		—			—		(61,900	)
Payments on finance contracts		(13,951	)		—		(131,430	)
Repayment of notes payable, other		—			—		(43,874	)
Net Cash Provided by Financing Activities		324,988			750,000		12,754,384

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(321,786	)		32,388		51,906

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		373,692			238,085		—

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	51,906		$	270,473	$	51,906

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	—		$	—	$	172,917
Cash paid for income taxes		—			—		—

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Fixed assets disposed for accrued liabilities	$	—		$	—	$	1,991
Issuance of common stock to Gold and Minerals Company, Inc. in connection with the purchase of interest in El Capitan, Ltd.		—			—		28
Issuance of common stock to Gold and Minerals Company, Inc. in connection with the purchase of the COD property		—			—		3,600
Issuance of common stock to Gold and Minerals Company, Inc. in connection with the purchase of the Weaver property		—			—		3,000

(Continued)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited)

	Six Months Ended March 31,				July 26, 2002 (Inception) Through March 31,
	2014		2013		2014

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES (Continued):
Net non-cash advances from affiliated company		—		—		562,990
Notes payable and accrued interest converted to equity		—		—		2,495,544
Accounts payable and accrued liabilities converted to equity		—		—		31,176
Issuance of common stock to former Company officers		—		—		329,015
Issuance of common stock to Gold and Minerals Company, Inc. stockholders in connection with the merger of Gold and Minerals Company, Inc.		—		—		177,752,452
Common stock granted for deferred costs		—		—		20,476
Reversal of common stock granted for deferred costs		20,476		—		20,476
Common stock issued equipment deposit		500,000		—		500,000
Debt issued equipment deposit		400,000		—		400,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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EL CAPITAN PRECIOUS METALS, INC.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of El Capitan Precious Metals, Inc. (“El Capitan” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, the financial statements do not include all information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed interim financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. Interim operating results are not necessarily indicative of results that may be expected for the year ending September 30, 2014, or for any subsequent period. These interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended September 30, 2013, included in the Company’s Annual Report on Form 10-K, filed with the SEC on December 27, 2013. The consolidated balance sheet at September 30, 2013, has been derived from the audited financial statements included in the 2013 Annual Report.

Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2013 as reported in the Form 10-K have been omitted. Certain prior year amounts have been reclassified to conform to the current year presentation.

Principles of Consolidation

With the acquisition of Gold and Minerals Company, Inc. (“G&M”), the Company also became the 100% owner of EL Capitan, Ltd. (“ECL”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries El Capitan Precious Metals, Inc., a Delaware corporation; G&M, a Nevada corporation; and ECL, an Arizona corporation. All significant inter-company accounts and transactions have been eliminated in consolidation.

New Accounting Pronouncements

Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC during the current reporting period did not, or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Management Estimates and Assumptions

The preparation of El Capitan’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates.

NOTE 2 – MINERAL PROPERTY COSTS

Mineral property exploration costs are expensed as incurred until such time as economic reserves are quantified. To date El Capitan has not established any proven or probable reserves on its mineral properties. The Company has capitalized $1,879,608 of mineral property acquisition costs reflecting its investment in the El Capitan site.

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NOTE 3 – short term note payable

On November 21, 2013, the Company entered into an agreement to finance a portion of its insurance premiums in the amount of $17,440 at an interest rate of 10.0% with equal payments of $3,575.58 including interest, due monthly beginning December 21, 2013 and continuing through April 21, 2014. As of March 31, 2014, the outstanding balance under this note payable was $3,488.

NOTE 4 – long term note payable

On February 28, 2014, the Company agreed to deliver a $400,000 promissory note for a deposit on the purchase of heavy mining equipment. The promissory note accrues interest at 4.5%, with principal and accrued interest payments to be made out of the Company’s proceeds from sale of iron ore from its mining operations. See “Note 5 - Commitments, Additional Financing Agreement,” below.

NOTE 5– COMMITMENTS

In June 2013, the Company signed a contract to have chain of custody head ore located in Denver, Colorado processed by an independent party. The head ore has been shipped to the processing site. The contract called for a $100,000 retainer that was paid in June 2013. Upon completion of the project, if it generated a profit, the Company was to receive the profit from the sale of the recovered precious metals above and beyond the retainer amount paid. Also, the Company was to issue 500,000 shares of the Company’s common stock pursuant to our 2005 Stock Incentive Plan to the processing company. The fair value of the common shares was determined to be $35,000 as of September 30, 2013 and it was being recognized over the service period through the expected completion date of the project in November 2013. The $100,000 retainer and $20,476 of the fair value of the shares were classified as current deferred costs on the balance sheet as of September 30, 2013. In November 2013, the project was completed and a profit was not generated. Accordingly, the $100,000 retainer was expensed and the deferred costs associated with the common shares of $20,476 were reversed during the six months ended March 31, 2014.

Related Party

In January 2012, the Company retained Management Resource Initiatives, Inc. (“MRI”) for managing and overseeing the process of marketing and selling the El Capitan property and performing other services aimed at furthering the Company's strategic goals pursuant to an unwritten consulting arrangement. Under this arrangement, the Company pays MRI a monthly consulting fee of $10,000 which was increased to $15,000 effective August 1, 2013. The Company made aggregate payments of $90,000 to MRI during the six months ended March 31, 2014. MRI is a related party because it is a corporation that is wholly-owned by John F. Stapleton who is Chief Financial Officer and Director of El Capitan.

Purchase Contract with Glencore AG

On March 10, 2014, the Company entered into a life-of-mine offtake agreement with Glencore AG (“Glencore”) for the sale of iron ore from the El Capitan property (such agreement is referred to herein as the “Glencore Purchase Contract”). Under the terms of the Glencore Purchase Contract, the Company agreed to sell to Glencore, and Glencore agreed to purchase from the Company, iron ore meeting the applicable specifications from the El Capitan mine. Payment for the iron ore is to be made pursuant an irrevocable letter of credit in favor of the Company. The purchase price is based on an index price less an applicable discount. Either party may terminate the Glencore Purchase Contract following a breach by the other party that remains uncured for a specified period after receipt of written notice.

Agreements with Logistica U.S. Terminals, LLC

In anticipation of, and in conjunction with, the Glencore Purchase Contract, the Company entered into a Master Services Agreement (the “Master Agreement”) and corresponding Iron Ore Processing Agreement (the “Processing Agreement”) with Logistica U.S. Terminals, LLC (“Logistica”), each effective as of February 28, 2014. Pursuant to these agreements, Logistica agreed to, among other things, provide the logistics required for the Company to fulfill its obligations under the Glencore Purchase Contract, to assist the Company in financing the costs of processing and delivering the iron ore under the Glencore Purchase Contract, and to provide and/or manage the processing of iron ore to be delivered under the Glencore Purchase Contract.

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Master Agreement with Logistica

Under the Master Agreement, the Company agreed that Logistica will be the exclusive logistics agent for the purpose of moving iron ore from the El Capitan property to Glencore’s designated exporting port or final destination. Logistics services include operational supplement chain management and supervision of all logistics providers and operations from the El Capitan mine to the vessel loading port. Logistics services do not include obtaining and maintaining operating, environmental and mining permits, and land and mineral rights, which are the responsibility of the Company. Also under the Master Agreement, Logistica is required to use its best efforts to establish an operating credit line capable of funding all processing and delivery costs and, upon opening and funding such a credit line, will disburse as needed all operating costs contemplated under the Glencore Purchase Contract. The Company is required to reimburse Logistica for all such amounts, without interest, out of payments received from Glencore in respect of the purchase of the iron ore.

In consideration for Logistica’s funding and logistics services, the Company will pay Logistica a percentage of ECPN’s profits from the sale of iron ore under the Glencore Purchase Contract. If any sale of iron ore under the Glencore Purchase Contract results in a loss instead of a profit, as a result of a decrease in index pricing of iron or otherwise, then the Company is required to make up the shortfall out of profits from its precious metals processing and refining business, to the extent of available profits therefrom, or otherwise. If iron index prices drop below the price in place at inception of the Glencore Purchase Contract by more than 5%, then the Company will be required to provide Logistica with a greater percentage of profits commensurate with and equivalent to Logistica’s loss of profit share due to the reduction in iron index prices. At inception of the Glencore Purchase Contract, the Platts 62% FE CFR China iron index price was $121.24. In the event of a future sale of the El Capitan property, the Company must either ensure that its agreements with Logistica are assumed by the purchaser or pay Logistica a termination fee.

Either party may terminate the Master Agreement following a breach by the other party that remains uncured for 60 days after receipt of written notice. The Master Agreement will otherwise continue indefinitely.

Processing Agreement with Logistica

Under the Processing Agreement, Logistica has agreed to deliver iron ore processing equipment to the El Capitan property and to use it best efforts to process to contract specification, stock pile and load for delivery iron ore that the Company has contracted to sell to Glencore under the Glencore Purchase Contract. In order to do so, Logistica will act as the Company’s turn-key contractor for all of the Company’s iron ore processing and delivery operations at the El Capitan property. In consideration for such services, the Company will pay Logistica a set price per metric ton of iron ore that is processed in accordance with the Glencore Purchase Contract specifications and purchased by Glencore. As additional compensation for entering into the Processing Agreement, the Company issued 4,000,000 shares of common stock to a designee of Logistica under the Company’s 2005 Stock Incentive Plan valued at $800,000. The shares vested immediately upon grant and the $800,000 was expensed in full during the six months ended March 31, 2014.

Either party may terminate the Processing Agreement following a breach by the other party that remains uncured for 60 days after receipt of written notice. The Processing Agreement will otherwise continue indefinitely.

Additional Financing Agreement

Under a separate agreement with Logistica, also dated February 28, 2014, Logistica agreed to remit a $900,000 payment on the Company’s behalf that represented the remaining balance of the Company’s purchase price for a heavy ore trailing separation line to be used for ore processing at the El Capitan mine site. The Company previously remitted $100,000 toward the purchase of such equipment. In consideration for Logistica remitting such payment, the Company agreed to deliver a $400,000 promissory note to Logistica and issued 2,500,000 shares of common stock to a designee of Logistica under the Company’s 2005 Stock Incentive Plan. The promissory note accrues interest at 4.5%, with principal and accrued interest payments to be made out of the Company’s proceeds from sale of iron ore from its mining operations. The fair value of the common stock was determined to be $500,000.

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NOTE 6 – STOCKHOLDERS’ EQUITY

Equity Purchase Agreement

On July 11, 2011, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Southridge Partners II, LP (“Southridge”), pursuant to which the Company may from time to time, in its discretion, sell newly-issued shares of its common stock to Southridge for aggregate gross proceeds of up to $5,000,000. On April 3, 2013, the Company entered into an amendment (the “Amendment”) to the Equity Purchase Agreement. Southridge’s purchase commitment under the Equity Purchase Agreement was scheduled to expire on the earlier of July 11, 2013, or the date on which aggregate purchases by Southridge under the Agreement total $5,000,000. Pursuant to the Amendment, the parties agreed to extend Southridge’s purchase commitment under the Equity Purchase Agreement for an additional year, expiring July 11, 2014. The maximum amount of Southridge’s aggregate purchase commitment under the Equity Purchase Agreement remains unchanged at $5,000,000.

El Capitan has no obligation to sell any shares under the Equity Purchase Agreement. The Equity Purchase Agreement may be terminated by the Company at any time. Southridge will have no obligation to purchase shares under the Equity Purchase Agreement to the extent that such purchase would cause Southridge to own more than 9.99% of El Capitan’s common stock.

For each share of the Company’s common stock purchased under the Equity Purchase Agreement, Southridge will pay 94.0% of the Market Price, which is defined as the average of the two lowest closing bid prices on the Over-the-Counter Bulletin Board, as reported by Bloomberg Finance L.P., during the five trading days following the date on which the Company notifies Southridge of a pending sale (the “Valuation Period”). After the expiration of the Valuation Period, Southridge will purchase the applicable number of shares subject to customary closing conditions.

The offering of shares under the Equity Purchase Agreement is made pursuant to the Company's effective registration statement on Form S-3 (Registration Statement No. 333-175038) previously filed with the Securities and Exchange Commission, and prospectus supplements thereunder. The S-3 registration statement utilized a “shelf” registration process. Under this shelf registration process, from time to time, the Company may sell any combination of the securities described in a prospectus supplement in one or more offerings, up to a total dollar amount of $5,000,000.

As of March 31, 2014, the Company had received aggregate proceeds of $3,800,000 under the Equity Purchase Agreement and had available gross proceeds of $1,200,000 under the Equity Purchase Agreement to sell newly-issued shares of El Capitan common stock. Subsequent to March 31, 2014 and prior to the filing of this report, the Company received additional aggregate proceeds of $100,000 leaving gross proceeds of $1,100,000 available under the Equity Purchase Agreement.

Issuances of Common Stock, Warrants and Options

Common Stock

During the six months ended March 31, 2014, the Company:

(i)

issued 3,676,436 shares of common stock under the Equity Purchase Agreement and received cash proceeds of $300,000;

(ii)

issued 4,350,000 shares of common stock for non-employee consulting services valued at $849,625;

(iii)

issued 100,000 shares of common stock upon the exercise of non-statutory stock options and the Company received cash proceeds of $21,500; and

(iv)

issued 2,500,000 shares of common stock for a deposit on heavy mining equipment valued at $500,000.

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Warrants

During the six months ended March 31, 2014, the Company did not issue any warrants. There were no warrants outstanding as of September 30, 2013 or March 31, 2014.

Options

Aggregate options expense recognized was $470,664 and $377,564 for the six months ended March 31, 2014 and 2013, respectively, related to the option grants and modifications described below. As of March 31, 2014 and 2013, there was $233,638 and $22,719, respectively of unamortized option expense.

During the six months ended March 31, 2014, the Company:

(i)

Granted, pursuant to the 2005 Stock Incentive Plan, to each of two new directors of the Company five-year options to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.3452 per share which will vest in equal monthly installments over two years, commencing on April 17, 2014. The fair value of the options was determined to be $233,638 using the Black-Scholes option pricing model and will be expensed as stock-based compensation over the vesting period. None was expensed as stock-based compensation during the six months ended March 31, 2014.

(ii)

Granted, pursuant to the 2005 Stock Incentive Plan, to each of two existing directors of the Company a five-year stock option to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.31 per share, all of which vested immediately. The fair value of the options was determined to be $209,896 using the Black-Scholes option pricing model and was expensed as stock-based compensation during the six months ended March 31, 2014.

(iii)

Granted, pursuant to the 2005 Stock Incentive Plan, to a consultant five-year stock options to purchase an aggregate of 100,000 shares of the Company’s common stock at an exercise price of $0.31 per share with the options vesting on the date of grant. The fair value of the options was determined to be $26,505 using the Black-Scholes option pricing model and was expensed as stock-based compensation during six months ended March 31, 2014.

(iv)

Amended the expiration date of an aggregate of 500,000 outstanding common stock options. The options were originally scheduled to expire on January 31, 2014. The expiration date of the 500,000 options was extended to January 31, 2019. The incremental increase in the fair value of the options was determined to be $27,718 using the Black-Scholes option pricing model and was expensed as stock-based compensation during six months ended March 31, 2014.

(v)

Granted, pursuant to the 2005 Stock Incentive Plan, to each of three directors of the Company a five-year stock option to purchase 500,000 of the Company’s common stock at an exercise price of $0.16 per share, all of which vested immediately. The fair value of the options was determined to be $159,456 using the Black-Scholes option pricing model and was expensed as stock-based compensation during the during six months ended March 31, 2014.

(vi)

Granted, pursuant to the 2005 Stock Incentive Plan, to a consultant five-year stock options to purchase an aggregate of 100,000 shares of the Company’s common stock at an exercise price of $0.14 per share with the options vesting on the date of grant. The fair value of the options was determined to be $12,423 using the Black-Scholes option pricing model and was expensed as stock-based compensation during six months ended March 31, 2014.

(vii)

Granted, pursuant to the 2005 Stock Incentive Plan, to a consultant five-year stock options to purchase an aggregate of 300,000 shares of the Company’s common stock at an exercise price of $0.13 per share with the options vesting on the date of grant. The fair value of the options was determined to be $34,665 using the Black-Scholes option pricing model and was expensed as stock-based compensation during six months ended March 31, 2014.

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The Company utilizes the Black-Scholes option pricing model to estimate the fair value of its option awards. The following table summarizes the significant assumptions used in the model during the six months ended March 31, 2014.

Six Months Ended March 31, 2014:

Exercise prices			$0.13 - $0.38
Expected volatilities			128.52% - 140.83%
Risk free interest rates			0.51% - 1.55%
Expected terms			2.5 - 5.0 years
Expected dividends			—

The following table summarizes the option activity for the six months ended March 31, 2014:

	Options Outstanding
				Weighted
				Average
	Number of			Exercise
	Shares			Price

Balance, September 30, 2013	6,100,000		$	0.42
Granted	4,000,000			0.243
Expired/Cancelled	(100,000	)		0.42
Exercised	(100,000	)		0.215
Balance March 31, 2014	9,900,000		$	0.35

Exercisable at September 30, 2013	6,100,000		$	0.42
Exercisable at March 31, 2014	8,900,000		$	0.35

The range of exercise prices and the weighted average exercise price and remaining weighted average life of the options outstanding at March 31, 2014 were $0.13 to $1.02 and 4.73 years, respectively. The range of exercise prices and the weighted average exercise price and remaining weighted average life of the vested and exercisable options outstanding at March 31, 2014 were $0.13 to $1.02 and 4.72 years, respectively. The aggregate intrinsic value of the outstanding options and vested options outstanding at March 31, 2014 was $211,250.

The Company adopted its 2005 Stock Incentive Plan (the “2005 Plan”) pursuant to which the Company reserved and registered 30,000,000 shares stock and option grants. As of March 31, 2014, there were 1,485,913 shares available for grant under the 2005 Plan, excluding the 9,900,000 options outstanding.

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NOTE 7 – SUBSEQUENT EVENTS

Subsequent to March 31, 2014 and prior to the filing of this report, El Capitan sold an aggregate of 584,317 shares to Southridge Partners under the Equity Purchase Agreement for aggregate cash proceeds of $100,000.

Subsequent to March 31, 2014 and prior to the filing of this report, El Capitan sold an aggregate of 1,954,545 shares of restricted common stock to four qualified investors for aggregate cash proceeds of $215,000.

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim consolidated financial statements and related notes which are included in Item 1 of this Quarterly Report on Form 10-Q, and with our audited financial statements and the “Risk Factors” section included in our Form 10-K for the year ended September 30, 2013, filed with the U.S. Securities and Exchange Commission (“SEC”) on December 27, 2013.

Cautionary Statement on Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain certain “forward-looking” statements as such term is defined by the SEC in its rules, regulations and releases, which represent the registrant’s expectations or beliefs, including but not limited to, statements concerning the registrant’s operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “might,” “plan,” “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the registrant’s control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation, managing and maintaining growth, the operations of the Company and its subsidiaries, volatility of stock price, commercial viability of any mineral deposits and any other factors discussed in this and other registrant filings with the SEC. The Company does not intend or undertake to update the information in this Form 10-Q if any forward-looking statement later turns out to be inaccurate.

Company Overview

We are an exploration stage company that has owned interests in several properties located in the southwestern United States in the past. We are principally engaged in the exploration of precious metals and other minerals. At this time, we are not engaged in any revenue-producing operations. We are considered an exploration stage company under the SEC criteria since we have not yet demonstrated the existence of proven or probable reserves at our El Capitan property. As a result, and in accordance with accounting principles generally accepted in the United States for exploration stage companies, all expenditures for exploration and evaluation of our properties are expensed as incurred.

We have completed testing and enhancement of our recovery process and have determined the existence and concentration of commercially extractable precious metals or other minerals at this property site. Based upon the results to date, we engaged an investment banker on January 31, 2012, to formalize plans for the marketing of the El Capitan property for sale to a major mining company.

In late September 2013, with the support of a different technology, we began a project of production processing of El Capitan head ore collected and managed under chain-of-custody guidelines. This is the first production-scale process ever to have been conducted by us. We anticipate the expected results will describe both the effectiveness of the process being used and the precious metals values recoverable, without the use of chemicals. This process involves the fine grinding of head ore and separation of iron ore from the precious metals without the use of cyanide.

In conjunction with this fine grind/separation recovery method, we processed 30 tons of our stored concentrates produced approximately 8 years ago that have been stored at the mine site. This initiative is important for two reasons: first, because it will provide materials process-handling information, and, second, because of the potential cash flow from the spot-market sale of any resulting dore’ bars. If we are able to generate such cash flow, we do not expect the amount to be significant. It is important to note, no direct information related to head ore value is to be gained from these concentrates since they do not have a documented history. The thirty tons of these concentrates was processed to determine the viability of the recovery of precious metals under this technology from these stored concentrates. Although these concentrates lack the pedigree of freshly mined and concentrated ore, testing has revealed that they may yield precious metals that can be sold in the spot market.

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On November 7, 2013, we announced that we have recovered 1.04 ounces per ton of gold equivalent from our El Capitan property. These results were produced from head ore that has been sold in an arm’s-length transaction to an independent refinery. The chain-of-custody ore was finely milled and magnetically separated using specific gravity concentrating methodology without the use of cyanide. This initial production testing represents the complete methodology - from head ore to final sale.

On November 20, 2013, we announced the fine grind/separation recovery method was also used on another 30 tons of stored concentrates that had been produced approximately eight years ago. After storage and possible contamination, these concentrates proved to be incompatible with this recovery process. We decided to discontinue processing of the stored concentrates and focus on processing the head ore and the recovery of precious metals.

Based upon results from the fine grind/separation method, we decided to utilize our 5-Acre Small Mining Permit to initiate limited-scale production, which we believe is a major step toward presenting the property for sale to potential industry purchasers. We hope to accomplish this step by demonstrating regular, certified production and sales of precious metals to independent refineries. It is incumbent upon us to demonstrate that the results we have obtained are repeatable. The 5-Acre Small Mining Permit can be moved as the mining plan dictates. We have contracted an independent contract miner to perform the physical mining and crushing, and to stockpile the ore on our owned land. We also retained a professional and experienced mining-management talent to run operations after the iron has been removed from the ore. The personnel will be on site and oversee the fine grinding and separation operations, which will be located on our owned land. The final processed concentrates will be sent off-site for smelting into dore’ bars for sale.

On January 6, 2014, we announced that we are working to commence on-site mining operations that will separate precious metals from the iron ore using the fine/grind separation recovery method referred to above and sell the iron ore.

During quarter ended March 31, 2014, we made major strides towards putting the El Capitan property into limited production. On March 10, 2014, we entered into a life-of-mine offtake agreement with Glencore AG (“Glencore”) for the sale of iron ore from the El Capitan property (such agreement is referred to herein as the “Glencore Purchase Contract”). Under the terms of the Glencore Purchase Contract, we agreed to sell to Glencore, and Glencore agreed to purchase from us, iron ore meeting the applicable specifications from the El Capitan mine. Payment for the iron ore is to be made pursuant an irrevocable letter of credit in our favor. The purchase price is based on an index price less an applicable discount.

In anticipation of, and in conjunction with, the Glencore Purchase Contract, we entered into a Master Services Agreement (the “Master Agreement”) and corresponding Iron Ore Processing Agreement (the “Processing Agreement”) with Logistica U.S. Terminals, LLC (“Logistica”), each effective as of February 28, 2014. Pursuant to these agreements, Logistica agreed to, among other things, provide the logistics required for us to fulfill its obligations under the Glencore Purchase Contract, to assist the Company in financing the costs of processing and delivering the iron ore under the Glencore Purchase Contract, and to provide and/or manage the processing of iron ore to be delivered under the Glencore Purchase Contract. In consideration for such services, the Company will pay Logistica a percentage of the Company’s profits from the sale of iron ore under the Glencore Purchase Contract (or make up the shortfall of any loss out of profits from its precious metals processing and refining business, to the extent of available profits therefrom, or otherwise) and pay a set price per metric ton of iron ore that is processed in accordance with the Glencore Purchase Contract specifications and purchased by Glencore. In addition, the Company issued 4,000,000 shares of common stock to a designee of Logistica.

Under a separate agreement with Logistica, also dated February 28, 2014, Logistica agreed to remit a $900,000 payment on our behalf that represented the remaining balance of our purchase price for a heavy ore trailing separation line to be used for ore processing at the El Capitan mine site. We previously remitted $100,000 toward the purchase of such equipment. In consideration for Logistica remitting such payment, we agreed to deliver a $400,000 promissory note to Logistica and we issued 2,500,000 shares of common stock to a designee of Logistica. The promissory note accrues interest at 4.5%, with principal and accrued interest payments to be made out of our proceeds from sale of iron ore from its mining operations.

For additional information regarding the Glencore Purchase Contract and our agreements with Logistica, see “Note 5 of the Notes to Consolidated Financial Statements – “Commitments.”

We expect that the planned mining operation will require approximately $2.5 million in an overall budget. We anticipate it will take approximately two to three months to bring the mining operation on-line after financing and permitting is in place. We expect that the proceeds from our sale of the iron will ultimately offset the expense of the mining operations and generate cash flow for the Company while we continue to pursue our ultimate strategic goal of selling the El Capital property.

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Financial Condition, Liquidity, and Plan of Operation

Historically we have relied on equity and debt financings to finance our ongoing operations. Our only current committed source of financing is the arrangement under our Equity Purchase Agreement (the “Equity Purchase Agreement”) with Southridge Partners II, L.P. (“Southridge”) that we entered into in July 2011 and subsequently amended on April 3, 2013. The Equity Purchase Agreement, as amended, is described below. Although we are assessing our financing alternatives at this time, we currently expect to continue utilizing the Equity Purchase Agreement to implement our business plan on the El Capitan mining project and continue our near-term business strategies, drawing down on the facility as operating costs require until the Equity Purchase Agreement expires. As amended, the term of the Equity Purchase Agreement will expire on July 11, 2014, and can be terminated by the Company at any time.

Southridge’s purchase commitment under the Equity Purchase Agreement terminates upon expiration or termination of the Equity Purchase Agreement or, if earlier, on the date that aggregate purchases by Southridge under the Equity Purchase Agreement total $5,000,000. The Equity Purchase Agreement permits the Company to sell newly-issued shares of our common stock to Southridge for aggregate proceeds of up to $5,000,000. We have no obligation to sell any shares under the Equity Purchase Agreement. The shares to be sold under the Equity Purchase Agreement will be made pursuant to our effective registration statement on Form S-3 filed with the SEC. Subsequent to March 31, 2014 and prior to the filing of this report, we have sold Southridge shares of common stock for aggregate proceeds of $100,000 and have the right, subject to certain conditions, to sell to Southridge $1,100,000 of newly-issued shares of El Capitan common stock pursuant to the Equity Purchase Agreement.

A further description of the Equity Purchase Agreement is set forth in Note 6 of the Notes to Consolidated Financial Statements – “Equity Purchase Agreement.”

We expect that the Equity Purchase Agreement will initially provide us with adequate funding to sustain our planned operations and provide a source of funds for our near-term business plan strategy. At this time, the Company plans to utilize such funds to complete any additional permitting requirements that may be required on the El Capitan property (no further exploration plans exist at this time) and pay for necessary corporate personnel and general and administrative operating costs and expenses to be incurred in putting the El Capitan property into limited production, and to support continued marketing of the El Capitan property for sale. To implement the business strategy for our mining plan, however, and to continue to provide funds to support the final phase of our business strategy – name to continue marketing the El Capitan property for sale - we will need to secure additional adequate financing. We may seek to obtain such financing pursuant to the sale of our equity or debt securities if sources of such financing become available on terms that we believe are acceptable. There is no guaranty that such financing will be available on acceptable terms or at all.

To provide us with continued flexibility to seek funds in the equity capital markets, on January 6, 2014 we filed a shelf registration statement on Form S-3 registering the offer and sale of securities in offerings from time to time, up to a maximum aggregate offering amount of $2,000,000. This registration statement was declared effective on January 26, 2014. We expect to use the proceeds from any sales of securities under the registration statement as necessary for deploying the El Capitan property into limited production, corporate operating costs and the continued marketing of the El Capitan property for sale. There is no guaranty that any such sales will occur.

As of March 31, 2014, we had cash on hand of $51,906 and an accumulated deficit of $203,818,415. Based upon our budgeted burn rate, we had operating capital for approximately 6 months as of such date, excluding any cash that would be received by the Company upon the sale of its shares of common stock under the terms of the Agreement.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013

Revenues

We have not yet realized any revenue from operations, nor do we expect to realize potential revenues until deployment of our planned mining operation on the El Capitan property. We anticipate generating revenues late in our third or early in the fourth operating quarter for our fiscal year ending September 30, 2014. There is no guarantee that we will achieve proven commercially viable recovery of precious and other metals at the El Capitan property.

Expenses and Net Loss

Our operating expenses increased $645,115 from $706,734 for the three months ended March 31, 2013, to $1,351,849 for the three months ended March 31, 2014. The increase is mainly attributable to increases in professional fees aggregating $34,020; legal and accounting of 35,497; and exploration expenses of $631,081. These increases were offset by a decrease in other general and administrative of $65,483.

The increases in professional fees is mainly attributable to costs incurred relating to investor relation activities and consisted of non-cash stock compensation of $23,505 and non-cash stock compensation of $9,625 for miscellaneous legal services.

The increase in legal and accounting fees is attributable to increases audit and accounting fees of $8,491 and an increase in legal fees of $27,006 which were mainly incurred in conjunction with the agreements entered into by us in the current period of measurement.

The decrease in other general and administrative is mainly attributable non-cash costs of $79,673 associated with options that were issued to the directors. This decrease was offset mainly by increases in shareholder meeting costs of $11,543 and press related costs of $3,150.

Our net loss for the three months ended March 31, 2014 increased to $1,353,599 from a net loss of $706,664 incurred for the comparable three month period ended March 31, 2013. The increase in net loss of $646,935 for the current period is attributable to the aforementioned net increase in operating expenses.

Six Months Ended March 31, 2014 Compared to Six Months Ended March 31, 2013

Revenues

Expenses and Net Loss

Our operating expenses increased $875,101 from $1,120,181 for the six months ended March 31, 2013 to $1,995,282 for the six months ended March 31, 2014. The increase is mainly attributable to increases in professional fees aggregating $119,016 and exploration expenses of $712,535.

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The increases in professional fees is mainly attributable to costs incurred relating to investor relation activities and consisted of non-cash stock compensation of $97,844; non-cash stock compensation of $9,625 for miscellaneous legal services and an increase in consulting fees of $27,000. These increases were offset by a decrease in financial consulting fees of $11,509.

The increase in mine related costs is attributable to non-cash stock compensation of $800,000 for services rendered related to deploying our mining operation at the El Capitan property and was offset by decreases in assay costs of $28,478, other mine consulting of $49,299 and mineral extraction costs of $86,089. These decreases were offset by an increase in mine legal fees of $19,862 which were incurred in connection of deploying our mining plan at the El Capitan property.

Our net loss for the six months ended March 31, 2014 increased to $1,997,060 from a net loss of $1,120,036 incurred for the comparable six month period ended March 31, 2013. The increase in net loss of $877,024 for the current period is attributable to the aforementioned net increase in operating expenses.

Factors Affecting Future Operating Results

We have generated no revenues, other than interest income and miscellaneous revenue from the sale of two dore’ bars, since inception. As a result, we have only a limited operating history upon which to evaluate our future potential performance. Our potential must be considered by evaluation of all risks and difficulties encountered by exploration companies which have not yet established business operations.

The price of gold and silver has experienced an increase in value over the past five years. A historical chart of their respective prices is contained in Item 1, the “Business” portion of the Company’s Annual Report on Form 10-K for the year ended September 30, 2013, filed with the SEC on December 27, 2013. Beginning in April 2013, the price of gold and silver has experienced a downward swing. A significant permanent drop in the price of gold, silver or other precious metals may have a materially adverse effect on the future results of potential operations and the opportunity to market the sale of the El Capitan property. The costs associated with the recovering of precious metals may also cause a material adverse effect on the financial success of the Company and our ability to market the sale of the El Capitan property.

Our Equity Purchase Agreement with Southridge will expire in July 2014. At such time, we will have no committed source of capital. Although we believe we will be able to obtain financing through private placements of our securities or in registered offerings under our registration statement on Form S-3, we cannot guaranty that we will be able to do so on terms acceptable to use or at all.

Under the Logistica Master Agreement, Logistica is required to use its best efforts to establish an operating credit line capable of funding all processing and delivery costs and, upon opening and funding such a credit line, will disburse as needed all operating costs contemplated under the Glencore Purchase Contract. We are required to reimburse Logistica for all such amounts, without interest, out of payments received from Glencore in respect of the purchase of the iron ore. If this credit line is not attained or is not in an adequate amount to fund our projected operations, our operations and liquidity may be adversely impacted.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2014, we did not engage in any off-balance sheet arrangements set forth in Item 303(a)(4) of Regulation S-K.

Contractual Obligations

As of March 31, 2014, we had no contractual obligations (including long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations and other long-term liabilities) reflected on our balance sheet under GAAP that are expected to have an adverse effect on our liquidity and cash flows in future periods.

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Critical Accounting Policies

Our unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates and judgments that significantly affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Note 1, “Business, Basis of Presentation and Significant Accounting Policies” in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended September 30, 2013 , filed with the SEC on December 27, 2013, describes our significant accounting policies which are reviewed by management on a regular basis.

New Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risks is limited to changes in interest rates. We do not use derivative financial instruments as part of an overall strategy to manage market risk.

We have long-term debt outstanding with a fixed rate of interest and have no investment in debt instruments other than highly liquid short-term investments. Accordingly, we consider our interest rate risk exposure to be insignificant at this time.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). The evaluation included certain control areas which are material to the Company and its size as an Exploration Stage Company. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by it in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. In addition, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, during the quarter ended March 31, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

We are not a party to any material pending legal proceedings and to our knowledge, no such proceedings by or against the Company have been threatened.

Item 1A.

Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described in our Annual Report on Form 10-K for the year ended September 30, 2013, filed with the U.S. Securities and Exchange Commission on December 27, 2013, in addition to the other information included in forward-looking statements made in this Quarterly Report on Form 10-Q or elsewhere by management from time to time prior to investing in our common stock.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits

(a)

Exhibits

Exhibit Number		Description

2.1		Agreement and Plan of Merger between the Company, Gold and Minerals Company, Inc. and MergerCo, dated June 28, 2010 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed July 7, 2010).
3.1		Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Form S-4 Registration Statement #333-170281 filed on November 2, 2010) .
3.2		Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Form S-4 Registration Statement #333-170281 filed on November 2, 2010) .
10.1		Agreement dated March 10, 2014 between the Company and Glencore AG. *+
10.2		Master Services Agreement dated February 28, 2014 by and between the Company and Logistica, U.S. Terminals, LLC, including the Iron Ore Processing Agreement attached as Appendix A thereto. *+

(Continued)

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Exhibit Number		Description

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document**
101.SCH*		XBRL Extension Schema Document**
101.CAL*		XBRL Extension Calculation Linkbase Document**
101.DEF*		XBRL Extension Definition Linkbase Document**
101.LAB*		XBRL Extension Labels Linkbase Document**
101.PRE*		XBRL Extension Presentation Linkbase Document**

__________________

Filed herewith.

* *

In accordance with Rule 406T of Regulation S-T, this information is deemed not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Confidential treatment has been requested as to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EL CAPITAN PRECIOUS METALS, INC.


Dated: May 14, 2014	By:	/s/ Charles C. Mottley
		Charles C. Mottley Chief Executive Officer, President and Director (Principal Executive Officer)

Dated: May 14, 2014

By:

/s/ John F. Stapleton

John F. Stapleton

Chief Financial Officer and Director

(Principal Financial Officer)

EXHIBIT 10.1

PORTIONS HEREOF IDENTIFIED BY [***] HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A COMPLETE COPY OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

GLENCORE AG

GLENCORE CONTRACT NO. 025.14.27124-P

THIS AGREEMENT is made on 10th March 2014

BETWEEN:		El Capitain Precious Metals, Inc.
		8390 Via de Ventura, Suite F-110
		Scottsdale, Arizona 85258-3189

		(Hereinafter called “Seller”)

AND:		Glencore AG
		Baarermattstrasse 3, P.O. Box 1301
		6341 Baar, Switzerland

		(Hereinafter called “Buyer”)

DEFINITIONS:

1 ton = 1 metric ton of 1000 kilograms or 2204.62 lbs.

QUANTITY:

2.1

Purchase of Iron Ore

The quantity of Product delivered under this Agreement is set out in Schedule 1 (the Base Quantity ).

SPECIFICATIONS:

The specifications of Product delivered are set out in Schedule 1 (Specifications).

PRICES:

4.1

CFR China Discharge Port Reference Price

The CFR Discharge port reference price will be set out in Schedule 1.

FAILURE TO MEET SPECIFICATIONS:

If the Product does not meet the Penalty Specifications in respect of the shipment, the Buyer shall be under no obligation to accept the shipment of Product.

PASSING OF TITLE AND RISK:

6.1

Passing of title and risk, freight cost

Product is sold and purchased under this Agreement on a CFR FO Discharge port basis in a vessel supplied by the Seller. Title to and all risk of loss, damage or destruction to the Product delivered shall pass to the buyer at the time it passes over the ship's rail from the loading devices into the vessel at the Loading Port in accordance with INCOterms 2010. The Seller will arrange and pay for the freight to transport the Product to the Discharge Port.

SHIPPING SCHEDULE:

Seller will advise Buyer of laycan once [***] tons are delivered to a port. The first is expected to occur by June 15th, 2014. The expected tonnage is [***] dmt +/- 10%.

WEIGHT

8.1

Weighing at Loading Port

At the Loading Port the Seller at the Seller's expense shall determine the weight of the shipment of Product by draft survey done by a mutually agreed Independent Surveyor and provide a certificate (Certificate of Weight) showing details of the determination which shall be the basis for the Seller's provisional invoice. The Buyer may, at the Buyer's expense, have its representative(s) present at the time of such loading.

8.2

Weighing at Discharge Port

At the Discharge Port the Buyer at the Buyer's expense shall arrange for CIQ, or an alternative third party to be mutually agreed upon by the Parties, to undertake weighing of the shipment by draft survey. The weight thus determined by CIQ (or the third party) shall be final as to the wet quantity of the shipment except as otherwise provided for in clause 8.3. If Buyer does not receive CIQ results within 60 days from completion of discharge, Load Port results shall be final. The dry quantity shall be determined by deducting the free moisture referred to in clause 9.2. from such wet quantity.

8.3

Weight differences

If after the determination of the weight of the shipment in accordance with clauses 8.1. and 8.2. there are any differences of weight outturns over 0.50 percent on a wet basis then the final weight of the shipment shall be determined by averaging the weight determined at the Discharge Port and at the Loading Port. The final weight of the shipment determined in accordance with clause 8.1. to this clause 8.3. shall be set out in a certificate which shall be the basis for the Seller's final invoice.

SAMPLING AND ANALYSIS

9.1

Sampling and analysis at Loading Port

At the Loading Port, the Seller at its own expense shall appoint a mutually agreed Independent Surveyor to take a representative sample of each shipment of Product. The sampling will be undertaken by a mTony Burgeranual sampling system to an agreed sampling schedule. For each sample, divide the sample into 2 parts, analyses such parts for chemical composition and for free moisture content and provide a certificate (Certificate of Analysis) showing details of the determination which shall be the basis for the Seller's provisional invoice. The Buyer may, at the Buyer's expense, have its representative(s) present at the time of such loading.

9.2

Sampling and analysis at Discharge Port

At the Discharge Port the Buyer, at the Buyer's expense shall arrange for CIQ, or an alternative third party to be mutually agreed upon by Parties, to take representative samples of each shipment of Product and analysis such sample for chemical and physical composition and for free moisture content. The Seller may at the Seller's expense have its representative(s) present at the time of sampling and analysis. The Buyer shall promptly forward to the Seller by airmail, facsimile and/or email a certificate issued by CIQ (or the third party) showing the percentage of chemical contents, the percentage of free moisture loss at 105 degrees Celsius and the relevant screen analysis. The CIQ (or third party) analysis shall be final except as otherwise provided for in clause 9.3. If Buyer does not receive CIQ results within 60 days from completion of discharge, Load Port results shall be final.

9.3

Analysis differences

Should there be a difference of 0.50% or more in the iron and moisture content analysis, or if there is a significant difference of 0.50% or more between the Buyer's and the Seller's analysis for physical or other chemical elements (which are in excess of the maximum content allowed in the Specifications) for such samples, the relevant percentage of free moisture or Fe content or other chemical or physical contents shall be determined by averaging the percentage determined at the Discharge Port and at the Loading Port. The final analysis of a shipment determined in accordance with clause 9.1 to this clause 9.3 shall be set out in a certificate which shall be the basis for the Seller's final invoice. For P and S the above difference should read as 0.05%.

10.

PAYMENT

10.1

Expected Value

The expected value of a shipment of Product (Expected Value) is calculated by multiplying the price (as detailed in Schedule 1) by the Base Quantity (expressed in DMT) for that shipment (as detailed in Schedule 1).

10.2

Letter of Credit

(a)

Payment of the invoice issued by the Seller to the Buyer for the delivery of Product under this Agreement shall be made under an irrevocable Letter of Credit in accordance with the provisions of this clause 10. LC should provide for reimbursement to the negotiating bank in 5 business days.

(b)

60 days before the beginning of each confirmed laycan in the loading port, the Buyer shall open, with a prime commercial bank through the Seller's Bank, an irrevocable Letter of Credit acceptable to the Seller, payable at sight, in favour of the Seller in an amount in US dollars equal to [***] % of the Expected Value of the shipment that includes:

	- Place of Expiry:		At the counter of negotiating bank
	- Date of Expiry:		90 days after LC issuance date
	- Available With:		Any bank
	- Partial shipments:		Allowed
	- Loading Port:		Greens Port or Galveston, USA
	- Discharging Port:		Main Port (s), China
	- Period for presentation:		15 days after BL date
	- Latest UCP Rules to apply

All Opening Bank charges including interest, and finance charges are for Buyer's account. All Advising, Negotiating Bank charges are for Seller's account. Letter of credit should mention that documents dated before the opening of the Letter of Credit are acceptable.

(c)

The Buyer indemnifies the Seller against any claim, loss, damage, liability, cost and expense, including any demurrage costs that may be incurred or sustained by the Seller arising out of the Buyer's non-compliance with paragraph (b).

10.3

Amount Due

The price payable for a shipment of Product (Amount Due) is calculated by multiplying the price (as detailed in Schedule 1) by quantity of Product on that shipment as evidenced on the Certificate of Weight (converted to DMT pursuant to clause 10.) The Amount Due shall be reduced by any price adjustments applicable as set forth in schedule 1 of this Agreement.

10.4

Provisional Payment (Provisional drawing)

(a)

The Letter of Credit shall be payable against the presentation of the Seller's sight draft for the amount of [***] per cent [***] % of the Amount Due, accompanied by the documents referred to in clause 10.4(b).

(b)

When drawing against the Letter of Credit for its provisional payment, the Seller shall present the following documents to Seller's Bank for negotiation:

(i)

a full set of clean on board ocean bills of lading made out to order, blank endorsed and notify blank; Charter Party B/L acceptable;

(ii)

Seller's provisional invoice for [***] % of the value in one original and two copies;

(iii)

Certificate of Analysis in one original and three copies, issued by Independent surveyor at Load Port;

(iv)

Certificate of Weight in one original and two copies issued by Independent surveyor at Load Port;

(v)

Certificate of Origin in one original and two copies issued by Chamber of Commerce and / or Industries.

10.5

Final payment (Final drawing)

Subject to clause 10.6, the Seller will prepare a final invoice for remaining [***] % of the value of the shipment once all CIQ details are known, based on the certificates provided in clause 8.3 and clause 9.3. Shall the balance amount be in Seller's favor, then the buyer shall pay this amount within 7 working days of the date of the seller’s final invoice. Otherwise, two copies of the final invoices shall be presented to the Buyer and any balance due to the Buyer will be made by telegraphic transfer within 7 working days of the date of the seller's final invoice.

10.6

Certificates of Weight and Analysis final in some circumstances

The Certificate of Weight and the Certificate of Analysis issued at load port shall be conclusive as to the weight or the analysis of the shipment of Product (as the case may be), and the provisional invoice issued under clause 10.4. will be considered the final invoice if:

(a)

A determination of weight under clause 8.2. is not undertaken at the Discharge Port;

(b)

All or part of the Product is lost after loading into the vessel (Seller is then not obliged to deliver replacement cargo); or

(c)

Product is contaminated (including by seawater) whilst on the vessel or being discharged.

(d)

The certificates mentioned in clauses 8.2 and 9.2 are not sent to Seller within days after completion of vessel discharge.

10.7

Performance Bond.

Seller shall provide an irrevocable and unconditional first demand guarantee or a standby letter of credit (jointly referred to as ‘Performance Bond’) issued by a bank. The issuing bank and the wording of the guarantee must be fully acceptable to the Buyer.

The amount of the Performance bond shall be [***] % ( [***] percent) of the expected CFR cargo value. Performance bond shall be opened within 3 working days before the expected LC issuance date.

Based on the expected laycan, the performance bond for the first shipment shall opened by 27th April 2014 and 48 days before the first day of shipment for every shipment there after.

11.

FORCE MAJEURE

Neither party to this contract shall be liable to the other party for any delay in performing or failure to perform any of its obligations due to events of Force Majeure including but not limited to war, blockade, revolution, riot, insurrection, civil commotion, strike, lockout, explosion, fire, flood, ice, storm, tempest, earthquake, laws, rules or regulations, applicable sanction laws, including but not limited to prohibitions on export or import and/or prohibitions applying to a nominated or carrying vessel or any other cause or causes whatsoever beyond the reasonable control of either party whether or not similar to the causes enumerated above. Failure to deliver or to accept delivery in whole or in part because of the occurrence of an event of Force Majeure shall not constitute a default hereunder or subject either party to liability for any resulting loss or damage.

Upon the occurrence of any event of Force Majeure, the party affected by the event of Force Majeure shall promptly notify the other party hereto in writing of such event and shall specify in reasonable detail the facts constituting such event of Force Majeure. Where such notice is not given within the time required, Force Majeure shall not justify the non-fulfillment of any obligations under this contract.

Both parties agree to use their respective reasonable efforts to cure any event of Force Majeure to the extent that it is reasonably possible to do so, it being understood that the settlement of strikes, lockouts, and any other industrial disputes shall be within the sole discretion of the party asserting Force Majeure.

In the event of Force Majeure, deliveries shall be suspended for the duration of such Force Majeure, but if such Force Majeure shall last more than 30 (thirty) calendar days, the tonnage affected may be cancelled with immediate effect by the party not having declared Force Majeure by written notice to the other party.

In the event that Force Majeure causes only a partial reduction in the total quantity of material that the Seller is under an obligation to deliver hereunder, the Seller shall allocate its available supplies of such material, if any, among any or all of its existing customers in a fair and equitable manner.

12.

GOVERNING LAWS, RESOLUTION OF DISPUTES ETC.

12.1

Governing Laws

This agreement, including the arbitration clause, shall be governed by, interpreted and construed in accordance with substantive New York State laws.

12.2

All disputes arising out of or in connection with this letter agreement, including any question regarding its existence, validity or termination, shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce and the U.S. Federal Arbitration Act, by three arbitrators appointed in accordance with the said Rules. The seat or legal place of arbitration shall be New York, New York, USA. The language of the arbitration shall be English, though testimony and documents may be submitted in other languages if accompanied by a translation. Judgment on the award may be entered in any court having jurisdiction thereof. The parties waive irrevocably their right to any form of appeal, review or recourse to any court or other judicial authority.

12.3

Arbitration not to interrupt performance

Neither the commencement nor conduct of arbitration will interrupt the Parties’ performance of their respective obligations under the Agreement nor affect any of the time limits fixed in the Agreement. This is not the case if such performance is materially affected by the submission of the matter in dispute to arbitration or by the result of the arbitration. The arbitration tribunal constituted to settle the matter in dispute is empowered to determine whether performance is materially affected.

13.

BREACH AND SURVIVAL

13.1

Termination

A Party may terminate this Agreement if:

(a)

the other Party (defaulting party) commits any material breach of any of its obligations under this Agreement and such breach continues unmediated (and for this purpose a breach will be deemed to be remedied by payment of reasonable compensation where no other remedy is reasonably practicable) for a period of 7 Business Days after the service of a notice by the non- defaulting Party requiring such breach to be remedied, or such longer period as may be specified in that notice;

(b)

the Parties agree to terminate this Agreement

13.2

Survival

The termination of this Agreement however caused shall be without prejudice to:

(a)

any obligations of the Parties which have accrued prior to that termination and which remain unsatisfied; and

(b)

any obligations of the Parties which are expressed to continue after termination.

In addition, clause 12 and clauses 14 to 19 inclusive and clauses 21 to 23 inclusive shall survive termination or expiry of this Agreement.

14.

NOTICES

14.1

Notices

Unless otherwise specified all notices, advices, consents and other communication (Communications) which are required to be or may be communicated by the Seller to the Buyer or by the Buyer to the Seller under this Agreement shall be:

(a)

in writing and signed by a person duly authorized by the sender;

(b)

shall be delivered to the intended recipient by prepaid post (if posted to an address in another country, by registered airmail) or by hand, email or fax to the address or fax number as per Details provided in this Agreement or the address, email or fax number last notified by the intended recipient to the sender.

14.2

Deemed delivery

Communications given in accordance with this clause 14 shall be deemed to have been properly given and received by the addressee:

(a)

in the case of delivery in person, when delivered;

(b)

in the case of facsimile transmission, on receipt by the sender of a transmission control report from the despatching machine showing the relevant number of pages and the correct destination fax machine number and indicating that the transmission has been made without error; or

(c)

in the case of delivery by post, 7 Business Days after the date of posting (if posted to an address in another country) or 2 Business Days after the date of posting (if posted to an address in the same country), but if the result is that a Communication would be taken to be given or made on a day which is not a Business Day in the place to which the Communication is sent or is later than 4pm (local time), it will be taken to have been duly given or made at the commencement of business on the next Business Day in that place.

14.3

Notices sent by email

Any Communication given or made may be sent by email if:

(a)

the Communication is signed by a person duly authorized by the sender;

(b)

the Communication is sent to the email address last notified by the intended recipient to the sender; and

(c)

the sender keeps an electronic and a printed copy of the Communication sent.

(d)

Signatures transmitted via email shall be deemed originals for the purposes thereof.

The recipient of a Communication sent under this clause must promptly acknowledge receipt of a Communication sent under this clause and must keep an electronic and a printed copy of the Communication.

14.4

Receipt of notices sent by email

A Communication sent under clause 14.3. will be taken to be duly given or made when receipt by the sender of an email acknowledgement from the recipient's information system showing that the Communication has been delivered to the email address last notified by the intended recipient to the sender;

15.

ENTIRE AGREEMENT AND AMENDMENT

15.1

Entire agreement

This instrument contains the entire agreement between the Parties in relation to the sale and purchase of Product hereby agreed and supersedes all prior negotiations, understandings and agreements, whether written or oral in relation to that Product.

15.2

Amendment

This Agreement shall not be modified, amended, or supplemented except by an instrument in writing duly executed by the Parties to this Agreement.

16.

CONFIDENTIALITY

16.1

General obligation

Subject to clause 16.2., each Party shall not disclose any information relating to this Agreement for a period of 1 (one) year from the signing hereof.

16.2

Permitted disclosure

A Party may disclose information:

(a)

to any third party when it has obtained the fully informed written consent of the other Party;

(b)

to a Related Corporation of the disclosing Party and the officers and employees of that Related Corporation provided the Related Corporation agrees to be bound by written confidentiality obligations no less onerous than those contained in this clause 16;

(c)

to officers and employees of any of the Parties; and

(d)

(subject to clause 16.3.) if, and to the extent, required to do so under any necessarily applicably legislation or under the rules or regulations of a recognized stock exchange applicable to the Party so disclosing or to a Related Corporation of that Party, and

(e)

to its technical and professional advisers for the purposes of this Agreement or for the purposes of advising the Party in relation to this Agreement, and

(f)

If it is so required for fulfillment of obligations under the contract.

16.3

Public Announcements

(a)

The Parties shall use their best endeavors to agree in advance the text of all public announcements to be made in relation to this Agreement.

(b)

A Party shall not attribute any public announcement to the other Party without that Party's consent.

16.4

Clause to Operate after Termination

The provisions of this clause 16 continue to bind a Party even after:

(a)

it ceases to be a Party to this Agreement; or

(b)

the Agreement terminates.

16.5

Officers and Employees

Each of the Parties shall ensure that:

(a)

its officers and employees;

(b)

the officers and employees of its Related Corporations; and

(c)

its independent consultants, contractors and technical and professional advisers, do not disclose confidential information to third parties or improperly use that information for its own benefit.

17.

APPOINTMENT OF AGENTS

17.1

Advice of agents

Either Party may appoint an agent or agents, at its cost, to carry out any and all of the functions required or authorised to be performed under this Agreement provided they advise the other Party of the name of such agent and of the functions entrusted to it.

17.2

Parties still liable

The appointment of any person as agent by a Party under this clause 17 shall not relieve such Party of any of its obligations or responsibilities under this Agreement.

18.

NO CONSEQUENTIAL LOSS

Notwithstanding anything to the contrary elsewhere in this Agreement, the Parties agree that no Party is in any circumstances liable in respect of any breach of this Agreement to the other Party for:

(a)

any loss of profit, loss of revenue, loss of use, loss of contract, loss of goodwill, or increased cost of working; or

(b)

any indirect or consequential loss.

19.

NO WAIVER

No failure to exercise nor any delay in exercising any right, power or remedy under this Agreement operates as a waiver. A single or partial exercise or waiver of the exercise of any right, power or remedy does not preclude any other or further exercise of that or any other right, power or remedy. A waiver is not valid or binding on the Party granting that waiver unless made in writing.

20.

FURTHER ASSURANCES

Each Party shall do anything necessary or desirable (including executing agreements and documents) to give full effect to this Agreement and the transactions contemplated by it.

21.

SEVERABILITY OF PROVISIONS

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction is ineffective as to that jurisdiction to the extent of the prohibition or unenforceability. That does not invalidate the remaining provisions of this Agreement nor affect the validity or enforceability of that provision in any other jurisdiction.

22.

COUNTERPARTS

This Agreement may be executed in any number of counterparts. All counterparts together will be taken to constitute one instrument.

23.

SET OFF

Only Buyer may at any time without notice to Seller set off any liability of Seller to Buyer against any liability of Buyer to Seller (in either case howsoever arising and whether any such liability is present or future, liquidated or unliquidated and irrespective of the currency of its denomination) and may for such purpose convert or exchange any currency. Any exercise by Buyer of its rights under this clause shall be without prejudice to any other rights or remedies available to Buyer under this contract or otherwise.

24.

COMPLIANCE

Buyer and Seller mutually warrant, represent and undertake that they will comply with all applicable laws, rules and regulations including without limitation sanctions and anti-corruption laws in performing this contract.

ACCEPTED:

Signed and stamped by:

GLENCORE AG		EL CAPITAN PRECIOUS METALS, INC.


/s/ Christian Wolfensberger		/s/ Charles Mottley

by its duly authorized person		by its duly authorized person

Christian Wolfensberger		Charles Mottley
Division Head		CEO & President

Print Full Name		Print Full Name


Stamp: ........................................................................................		Stamp: ........................................................................................

Schedule 1 ;

Base Quantity

The total Quantity to be made available for sale and purchase under this Agreement is a life of mine offtake. Product will be delivered monthly. After the ramp up period, the typical shipment will contain approximately [***] dmt +/- 10% in Buyer’s option.

Specifications

1) Name of commodity: Iron Ore

2) Origin of Material: USA

3) Chemical Composition, on dry basis, percentage by weight:

[***]

4) Physical Specification:

[***]

Buyer has the option to reject the cargo at any point if the chemical composition or sizing of any of the elements exceeds its rejection %.

If the cargo contains any deleterious and/or hazardous elements rendering the material unsafe for use or unsaleable to an end user, then Buyer has the right to cancel and terminate the contract. Any cost associated with or pursuant to this clause shall be for seller’s account.

Pricing

Index CFR :

Average quotes of the Platts 62.0% FE CFR China Index during the QP

Quotation Period (“QP”) :

The QP will be determined based on the exact sailing date of each shipment, as stated in the Bill of Lading. The month in which the Bill of Lading falls will be considered “M”. Buyer will declare the QP of M or M+5 in the month M+3.

Buyer Discount :

[***] % on CFR value of the product

Formula :

(Index CFR during the QP) – Buyer Discount +/- quality adjustments (premium/penalties depending on the final analysis of material, as described in the analysis clauses)

For example, if :

The Platts 62.0% average during the QP = $134.00/dmt (21-Oct-13)

Actual Fe for the cargo = 62.00%

All deterrent elements equal the Guaranteed levels

then the price received by the Buyer would be

$134.00– [***] = $ [***]

Payment Terms, Freight Rate, Loading Rate, and Turn Time

CFR Discharge Port Reference Price for Product, Turn Time and Load Rate are set out below.

Product price and determinant for product price set out in the following two tables:

CFR, Main Ports China

Payment Terms – Letter of Credit

LC based on the provisional CFR price, covering [***] % payment against presentation of shipping documents

Payment Terms - [***] % balance

Payment of [***] % balance will be made

after all CIQ details are known and according to Weighting / Sampling / Analysis sections as described in Sections 8 and 9 of this Contract

Provisional Price :

[(Index CFR of the last available quote before the LC opening date) – Buyer

Discount +/- quality adjustments (premium/penalties depending on the final analysis

of material, as described in the analysis clauses)]

CFR, Main Ports China
Discharge Rate (WMT PWWD SHINC) (per weather working day, Sunday and Holidays included)	20,000 (24 Hour)
Discharge Port Turn Time (Hours)	12
Demurrage Rate (US$/day)	Demurrage cap: as per charter party pdpr/hdltsbe
Despatch	Half of demurrage rate

Demurrage shall be paid by Seller to Buyer for all time in excess of allowed laytime and despatch at half the demurrage rate shall be paid by Buyer to Seller for all laytime saved in discharging

Premium / Penalties :

Chemical Composition:

A) Fe Content:

Penalty/Bonus Specification

(Percentage by weight)

Price Adjustments

(Fractions Pro-rata)

Iron (Fe)

Greater than Guaranteed

The base CFR price shall be increased by a

single Fe:Price pro rata adjustment in

USD/DMTU for each 1% of Fe above

Guaranteed, fractions pro-rata.

Less than Guaranteed

The base CFR price shall be decreased by a

double Fe:Price pro rata adjustment in

USD/DMTU for each 1% of Fe below

Guaranteed, fractions pro-rata

B) For other elements :

For excess Silica (SiO2): At the rate of US$ [***] PDMT for silica levels above Guaranteed, fractions pro-rata.

ii)

For excess Alumina (Al2O3): At the rate of US$ [***] PDMT for each 1.00% in excess of Guaranteed, fractions pro-rata.

iii)

For excess Phosphorus (P): At the rate of US$ [***] PDMT for each 0.01% in excess of Guaranteed, fractions pro-rata.

iv)

For excess Sulphur (S): At the rate of US$ [***] PDMT for each 0.01 % in excess of Guaranteed, fractions pro-rata.

iv)

For excess Potassium (K2O) + Sodium Oxide (Na2O): At the rate of US$ [***] PDMT for each 0.01 % in excess of Guaranteed, fractions pro-rata.

iv)

For excess Titanium Dioxide (TiO2): At the rate of US$ [***] PDMT for each 0.01 % in excess of Guaranteed, fractions pro-rata.

C) Size Penalty (Percentage by weight) :

For each 1% of material in excess of the Guaranteed % above 3.000 mm, the price to be decreased by USD [***] /WMT. Fractions pro rata.

ii)

For each 1% of material in excess of the Guaranteed % below 1.000 mm, the price to be decreased by USD [***] /WMT. Fractions pro rata.

Schedule 2 : Discharging terms and conditions

1.1

Discharge Port

(i) The Buyer shall indemnify the Seller for any liability, penalty or other costs resulting from the Buyer's failure to provide such safe berth and safe port. The Buyer will ensure that the nominated berth is free and accessible at all times by the vessel for delivery of Product. The Buyer shall make all arrangements to receive the Product from the vessel on her arrival alongside the nominated berth.

1.2

Agency, Port charges, dues and taxes

(a) Vessels are to be consigned to the Seller's agent at the Discharge Port. Seller will nominate and appoint the agent based on a recommendation from Buyer, such recommendation not to be unreasonably denied. The Seller is only accountable for all port charges associated with bringing the vessel alongside the discharge berth.

(b) Any taxes, dues or other charges levied against the cargo at discharge port shall be for the Buyer's account. All such charges shall be paid promptly by the Buyer such that the Buyer is in a position to take delivery of the cargo without delay.

1.5

Notice of Readiness

(a) Vessel to tender Notice of Readiness (NOR). WIFPON, WCCON, WIPON, WIBON upon arrival at loadport or its official anchorage respective waiting area, during ATDNSHINC.

1.6

Counting of Laytime

(a)

Laytime shall commence counting following the number of hours detailed as Turn Time in Schedule 1 after a valid Notice of Readiness has been tendered or when loading commences, whichever occurs first.

(b)

Laytime shall cease on completion of loading.

(d)

Time used in shifting directly between berths at the Seller's request or delays to loading due to disruptions in the Load Ports operations shall count as laytime.

(e)

Any time lost by the vessel in obtaining gas free clearance, either directly or consequentially, shall be for the Seller's account.

(f)

Force Majeure or bad weather shall not count as laytime.

(g)

Laytime permitted at the Discharge Port shall be calculated on bill of lading quantity.

1.7

Discharge rates

The discharge rate at the Discharging Port applicable in this Agreement per weather working day of twenty four (24) consecutive hours, Saturdays, Sundays and holidays inclusive will be as provided in Schedule 1.

1.8

Demurrage/Detention/Despatch rates

The Buyer and the Seller shall agree despatch and demurrage calculations following departure of the vessel from the Discharge Port. Demurrage or dispatch money shall be paid by seller or buyer, respectively, within ten (10) days from mutual agreement on amount. Any additional demurrage incurred at the Discharge Port due to Buyer not opening a Letter of Credit in accordance with the terms of this Agreement shall be for the Buyer's account.

Buyer becomes only liable for detention if discharge is delayed due to pending import formalities, dues, taxes and/or levies with local and/or government authorities. Any other reason whatever nature can not be considered as detention.

The demurrage rate shall be as per Charter Party per 24 hour day. Demurrage calculated per day and pro rata for part of a day, for all time used in excess of allowed laytime and shall receive despatch being earned at one half the rate of demurrage per day or pro rata for part of a day for all time saved of allowed laytime.

1.9

Vessel nomination procedure

Seller shall nominate a vessel within 15 days from the LC issuance date. Seller will nominate suitable vessel not older than 22 years with full main details to Seller at least 10 days prior to the first day of laycan. Buyer to grant vessel acceptance within 24 hours satshex after receipt of corresponding vessel nomination. Performing vessel to be fully P+I club covered, ISPS + ISM + ITF or equivalent compliant and certified and to be so maintained for the duration of the voyage.

Seller has the right to substitute the vessel provided that the substituting vessel meets theä loading restrictions.

The International Code for the Security of Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (the “ISPS Code”) as per BIMCO being an integrated part for the shipment under this contract.

Seller warrants that they and/or any other owner, disponent owner in the charter chain and the vessel are not and have not been listed on the United States Department of the Treasury OFAC SDN list as available on the link:

http://www.ustreas.gov/offices/enforcement/ofac/sdn/

on the day vessel is nominated to Buyer.

1.10

ISPS Code

Seller warrants that any vessel which they nominate in connection with this contract complies with the requirements of the ISPS Code and/or the US Maritime Transportation Security Act 2002 ("MTSA"). The Seller warrants that any port at which the goods sold under this contract are or are intended to be loaded complies with the requirements of the ISPS Code and/or MTSA (if applicable).

Seller shall be responsible for any and all costs and/or expenses and/or losses and/or damages and/or delay arising out of or in connection with the failure of the vessel or its owners or charterers to comply with the requirements of the ISPS Code or, if applicable, MTSA and any time thereby lost shall not count as used laytime or time on demurrage. Seller shall be responsible for any and all costs and/or expenses and/or losses and/or damages and/or delay arising out of or in connection with any failure by the loadport to comply with the requirements of the ISPS Code and/or MTSA and any time thereby lost shall count as used laytime or time on demurrage.

1.11

Other terms and conditions not described herein to be as per relevant Stemmor or Gencon C/P terms.

1.12

Seller guarantees that cargo provided is safe for transport by sea according to the IMSBC code. Seller to provide certificates stating cargo is within the TML (Transportable Moisture Limit) if required by Master prior to loading. If required, this TML and FMP (Flow Moisture Point) analysis must be performed by the relevant P&I Club appointed inspectors. If cargo is thereby deemed not suitable for shipment any delays or related costs, direct or indirect are to be for Seller's account.

1.13

Letter of Indemnity (LOI)

In case original Bill of Ladings are not available at Discharging Port at the time of vessel arrival, Seller guarantees to discharge cargo against Letter of Indemnity (LOI) issued by Buyer. Such LOI will be issued in favor of the Seller on exactly the same terms as the standard P&I Club format the owner of the vessel requires from Seller.

Schedule 3 : Definitions and interpretation

The following definitions apply unless the context requires otherwise:

Agreement means this agreement, as may be amended from time to time.

Amount Due has the meaning given in clause 10.3.

Base Quantity has the meaning given in clause 2.1.

Business Day means days excluding Saturdays, Sundays, public holidays and banking holidays in Singapore

Certificate of Analysis has the meaning given in clause 9.1. Certificate of Weight has the meaning given in clause 8.1. CFR has the meaning ascribed to it in Incoterms.

CIQ means the Entry-Exit inspection and Quarantine of PRC.

Communications has the meaning given in clause 14.1.

Delivered Quantity means total the amount of Product delivered under this Agreement as reflected in the Bills of Lading.

Discharge Port means a port of PRC.

DMT means a tonne on a dry basis.

dollars and cents mean respectively dollars and cents in lawful currency of the United States of America.

Draft (when fully loaded) means, as the context requires:
(a) in respect of a vessel prior to completion of loading, the draft which that vessel would have if the quantity and type of ore scheduled to be loaded into it were loaded into it; or
(b) in respect of a vessel after completion of loading, the draft of the vessel as determined by draft survey. dry basis when applied to Product means Product dried at 105s Celsius Expected Value has the meaning given in clause 11.1.

dry basis when applied to Product means Product dried at 105s Celsius

Force Majeure Event means an event or cause specified in clause 12.1.

Incoterms means Incoterms 2010 published by ICC Publishing SA

LIBOR Rate means the rate for deposits in dollars for a period of three (3) months which appears on Reuters page Libor01 at or about 11.00am London time on the relevant day, unless no such rate is available and displayed, in which case the LIBOR Rate shall be a rate which is an average (mean) of the LIBOR Rate for the preceding week.

M means the value of an index for the average of a calendar month during the bill of lading. For example, if the bill of lading for a cargo is December 20th. Then “M” would be December.

M+5 means the value of an index for the average of a calendar month five calendar months after the bill of lading. For example, if the bill of lading for a cargo is December 20th. Then “M” would be December and “M+5” would be May.

Natural basis when applied to Product means Product in its natural or wet state

Notice of Readiness means a notice of readiness to load a vessel.

Party means a party to this Agreement.

Place of Loading means the relevant place of loading within the Loading Port.

PRC means the People's Republic of China.

QP means Quotational Period

Specifications has the meaning given in clause 3.

Tonne means a metric ton equaling 1,000 kilograms.

Wet basis when applied to Product means Product in its natural or wet state.

WMT means a tonne on a natural basis.

EXHIBIT 10.2

Portions hereof identified by [***] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. A complete copy of this document has been filed separately with the Securities and Exchange Commission.

MASTER SERVICE AGREEMENT

THIS MASTER SERVICE AGREEMENT (“Agreement”) is made effective as of as of 28 ^th day of February, 2014, by and between Logistica U.S. Terminals, LLC (“LOGISTICA”), with its principal office at 8700 Old Highway 48, Brownsville, Texas 78521 and El Capitan Precious Metals, Inc. (“ECPN”), with its principal office at 8390 Via de Ventura, Suite F-110, Scottsdale, Arizona 85258-3189.

RECITALS

WHEREAS, ECPN is entering into a contract to sell iron ore to GLENCORE INTERNATIONAL AG (“Glencore”) from its El Capitan mine in Lincoln County, New Mexico (“El Capitan”) and Glencore has agreed to pay for such iron ore via Documentary Letter of Credit (“DLC”) allowing partial shipments; and

WHEREAS, ECPN and Glencore are simultaneous herewith entering into agreement for the sale of iron ore from ECPN’s El Capitan mine (the “Purchase Contract”); and

WHEREAS, ECPN wishes LOGISTICA to provide a turnkey solutions for (i) funding the DLC payable to ECPN under the Purchase Contract; and (ii) providing the Logistics, as that term is defined below, required to fulfill the Purchase Contract for shipment of iron ore from the El Capitan mine site to vessel loading at the exporting ports, all as further described herein; and

WHEREAS, ECPN wishes LOGISTICA to provide a turnkey solution for mining, crushing and processing of iron ore at the El Capitan mine site, all as further described in the Iron Ore Processing Agreement attached as Appendix A hereto and executed by the parties simultaneous with the execution of this Agreement; and

WHEREAS, LOGISTICA has agreed to provide the above-referenced turnkey solutions to ECPN.

NOW THEREFORE, LOGISTICA and ECPN hereby enter into this Agreement, the terms and conditions of which are set forth below, in furtherance of the contracts and desired objectives set forth above, to wit :

FUNDING TRANSACTIONS

1.1

Operating Account; Establishment and Purpose

(a) ECPN agrees to obtain a DLC with partial shipments option from Glencore that: (i) conforms with the Purchase Contract; and (ii) meets all characteristics required by LOGISTICA and LOGISTICA‘s monetization lending firm.

(b) The terms of the DLC and the Purchase Contract require that DLC payments for the iron ore be made directly to an ECPN bank account ( the “Operating Account” ). The parties agree that ECPN should become a banking customer of, and establish a bank account at, a bank designated by LOGISTICA and acceptable to the issuer of the Glencore DLC. As a customer of the bank, ECPN will request the bank to act as the advising bank for the DLC and the DLC payment following each shipment shall be credited to the bank account designated “El Capitan Precious Metals, Inc.” as the account of the seller under the DLC terms.

(c) LOGISTICA shall assist in establishing ECPN’s account (the “Operating Account”) with a bank designated by LOGISTICA (the “Bank”). As ECPN is the Bank customer, the CEO of ECPN, Charles C. Mottley, shall be a signatory on the Operating Account. ECPN shall provide a specific power of attorney, in the form attached as Appendix B hereto, to a designated officer of LOGISTICA to empower such person to serve as the primary signatory on the Operating Account.

(d) The Operating Account shall receive all funds from credit lines, transfers, advances, security deposits, monetization funding and DLC payments. Funds from the Operating Account shall pay all disbursements referenced in this Agreement, including the payments for the iron ore. The signatory designated by LOGISTICA shall be responsible for making the disbursements from the Operating account as described herein.

(e) ECPN and LOGISTICA shall be authorized to view account information online at any time for the Operating Account and shall receive duplicate statements for the Operating Account. Similarly, ECPN shall have access to account balance and other information related to the Credit Line, online if available, and shall also receive duplicate statements.

1.2

Credit Line Advances and Disbursements

(a) Simultaneous with the opening of the Operating Account, LOGISTICA shall use its best efforts and due diligence to establish an initial credit line capable of funding all the costs associated with:

(i) the per ton cost for ore processing, as agreed by the parties, including mining and stockpiling, crushing, screening, sorting and site supervision (“Processing”); and

(ii) trucks and rail cars, weighing, quality sample analysis, product testing, trucking and rail transportation from the mine to the assigned US or Mexican sea port, mining, crushing, and processing, inland transloading, terminals, handling, rail car leasing, demurrage and storage maneuvers, storage at the sea port, bill of lading documentation, logistical services and supply chain management of all the operation (“Logistics”) and any other or additional cost associated to comply the terms in the Purchase Contract including insurance and bonds (“Related Costs”).

(b) Upon the opening and funding of the Operating Account, LOGISTICA shall disburse, as may be needed, all the costs for all services as may be required or contemplated under the Purchase Contract including, but not limited to, all amounts referenced in Section 1.2(a).

(c) This Agreement is expressly conditioned upon LOGISTICA’s capability of obtaining said line of credit at a fee/cost mutually acceptable to both LOGISTICA and ECPN; should LOGISTICA not be able obtain such a line of credit, both parties hereto agree to work together with Glencore and/or other reasonably accessible financing resources in an attempt to secure mutually acceptable funding to carry out this Agreement. This Agreement is further conditioned upon ECPN obtaining a DLC satisfactory to it, to LOGISTICA and to LOGISTICA’s monetization lender(s). In the event that the credit line is not met in a reasonable period of time, or a DLC satisfactory to the parties is not secured, both parties hereto agree that this Agreement is null and void without fault or damages to either party.

REPAYMENT OF CREDIT LINE ADVANCES AND OTHER DISTRIBUTIONS

2.1

Reimbursement of Credit Line Advances to LOGISTICA

Upon the processing and funding of the Glencore DLC, and the crediting of such funds to the Operating Account as described in Section 1.1(b), the LOGISTICA-designated signatory shall reimburse LOGISTICA for credit line funds it has advanced to the Operating Account (the “Credit Line Advances”). Reimbursement of Credit Line Advances (i) shall be a prioritized payment; (ii) shall be tendered before any other distribution from the Operating Account; and (iii) shall bear no interest.

2.2

Other Distributions

(a) In consideration of the funding and Logistics services provided by LOGISTICA to ECPN under this Agreement, ECPN agrees to compensate LOGISTICA with a payment of [***] percent ( [***] %) of the ECPN Profit when and as every such payment is actually made from the Operating Account. The ECPN Profit, including the [***] % thereof allocated to LOGISTICA, shall be distributed to ECPN and LOGISTICA upon each DLC funding to the Operating Account, subject to disbursements required prior to the Profit distribution as described in Section 2.2(b) below.

(b) The term “Profit” as used herein shall mean the amount of money remaining in the Operating Account following the payment of funds by LOGISTICA’s signatory for:

(i) Reimbursement to LOGISTICA for Credit Line Advances;

(ii) Payment of Logistics and Related Costs;

(iii) Payment of Processing costs; and

(iv) Retention of funds, in an amount determined by ECPN and LOGISTICA, to remain in the Operating Account as a reserve for future contingencies.

The amount of funds otherwise remaining in the Operating Account and available for distribution after the foregoing payments and reserves shall be deemed the ECPN Profit, allocable [***] % to ECPN and [***] % to LOGISTICA. Subject to the payments/reserves described in Section 2.2(c), LOGISTICA’s designated signatory agrees to pay the Profit upon the crediting to the Operating Account of funds resulting from the processing and payment of each Glencore DLC.

(c) In entering into this Agreement, ECPN is relying on LOGISTICA’s estimated assessment of pricing, its Operational and Logistical costs, and LOGISTICA maximizing the Profits of the operations, to the extent reasonable and feasible. If the international price or Glencore’s price of iron ore decreases or increases from the Purchase Contract rate, the minimum profit should vary in the same proportion. ECPN understands and accepts that LOGISTICA’s assessment of potential profit is subject to many factors including, but not limited to, market fluctuations, obtainable and sustainable logistical costs and timely performance by all supply chain subcontractors; therefore, said estimate of profit is not a guarantee, warranty or contract of actual performance or a minimum or “floor” profit to ECPN.

(d) LOGISTICA requires from ECPN an adequate guaranty in the event Iron Index Prices drop below those in place at the inception of the Purchase Contract. ECPN will provide LOGISTICA with a greater percentage of profit [as defined in Section 2.2(b)], commensurate with and equivalent to LOGISTICA’s loss of profit share in the event of any Iron Index Price reduction of greater than [***] %.

(e) All payments and disbursements to ECPN and LOGISTICA, whether reimbursements or distributions, shall be made by bank wire transfer to the bank accounts specified in the bank wire transfer instructions attached hereto as Appendix C and Appendix D. Such accounts may be updated in writing to LOGISTICA’s designated signatory.

2.3

Contingent Funding of Operating Account

LOGISTICA’s establishment of the Credit Line referenced in Section 1.2(a) is intended to be sufficient to cover the recurring costs described in Sections 1.2(a)(i) and 1.2(a)(ii). In the event the Index price of iron ore and amounts payable to ECPN decrease pursuant to the terms of the Purchase Contract, and such decreases result in a deficit in the Operating Account instead of a Profit, then ECPN shall fund the Operating Account with its profits from its precious metals processing and refining operation, to the extent of profits available to it or will otherwise arrange for funding to cover such deficit. The funding, if applicable, shall occur following each DLC funding into the Operating Account.

2.4

Loss Prevention

It is acknowledged by ECPN that, in undertaking the activities, and the resulting expenditures, for compliance with the requirements of this Agreement, LOGISTICA will expend large amounts of capital. As such, ECPN shall keep LOGISTICA closely informed of any potential sales of its mine site property or any other matter that could affect the investment of LOGISTICA in the project contemplated by this Agreement. In the case of a sale of the mine site property by ECPN, ECPN shall insure that (i) the agreements involved in this project are properly assumed by the purchaser; or (ii) LOGISTICA shall be paid a liquidated sum of $[***] ([***]) U.S. Dollars as reimbursement for its capital expenses and logistical infrastructure implementation costs, such sum coming out of the mine sale proceeds. ECPN and LOGISTICA shall fully cooperate with one another to accomplish such loss prevention.

LOGISTICS

(a) LOGISTICA shall supply within its operational responsibilities supply chain management and supervision of all logistics providers and operations from the mine to the vessel loading at the port. The Logistics will be provided at LOGISTICA’s preferred pricing.

(b) LOGISTICA shall use its best efforts to assure that the Credit Line Advance to the Operating Account will at all times be in an amount sufficient to pay the Logistics. In fulfillment of its responsibility to provide Logistics, the LOGISTICA-designated signatory shall pay all Logistics invoices from the Operating Account as may be needed in furtherance of the Purchase Contract.

(c) At the time of vessel loading at the departure port, LOGISTICA shall assemble all documents necessary for DLC processing and, when assembled, deliver to the Bank a full set of original payment documents and required copies, in accordance with the terms of the Purchase Contract

(d) ECPN hereby agrees that LOGISTICA shall serve as its exclusive agent for logistics, including but not limited to, ore transfer services at inland terminals and sea ports, handling, trucking, rail and sea transportation and/or subcontracting third parties to provide such logistical services, the purpose of which is to move iron ore from the El Capitan mine site to Glencore’s designated exporting port or final destinations.

INDEMNITY AND DAMAGES

(a) ECPN is relying upon LOGISTICA to provide the necessary logistical services to load, transport and deliver, from mine to port, bulk iron ore product in performance of the Purchase Contract with Glencore. LOGISTICA is relying upon ECPN to provide operating permits, environmental permits, mining permits, land and mineral rights and a Purchase Contract. Therefore in justifiable, detrimental reliance upon the fulfillment of these respective obligations to each other, LOGISTICA and ECPN hereby expressly agree to mutually indemnify, defend and hold each other harmless with respect to any claim, lawsuit or other adverse action by Glencore or a third party which relates to the services and/or products to be provided by them under this Agreement. Any attorney selected by either party to defend the other must be reasonably satisfactory to the other. IN NO EVENT SHALL EITHER PARTY BE LIABLE OR OBLIGATED IN ANY MANNER FOR ANY SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), EVEN IF SUCH PARTY HAS BEEN INFORMED OF THE POSSIBILITY OF ANY SUCH DAMAGES IN ADVANCE.

(b) ECPN expressly acknowledges that LOGISTICA’s performance under this Master Service Agreement and the appended Iron Ore Processing Agreement is dependent upon the diligent, competent and timely performance of numerous independent subcontractors (including, but not limited to, iron ore tailing processors, trucking operators, railways, product quality control inspectors, shipping agents and facilities, etc.) in the mining, processing, shipping and delivery supply/logistics chain, accordingly, ECPN RELEASES LOGISTICA AND HOLDS IT HARMLESS OF AND FROM ANY CLAIM FOR INDEMNITY OR DAMAGE, OF WHATEVER NATURE, ARISING FROM OR ATTRIBUTABLE TO THE ACTS, OMISSIONS, NEGLIGENCE OR FAILURES OF ANY SUBCONTRACTOR OR VENDOR PROVIDING SERVICES UNDER, OR REQUIRED/CONTEMPLATED UNDER, THIS AGREEMENT. Logistica agrees, to the extent economically feasible and reasonably available, to require that subcontractors and vendors providing services under this Agreement have in force and effect insurance and/or bonding to cover claims against LOGISTICA and/or ECPN for acts, omissions, negligence or failures attributable to said subcontractors and vendors.

DISPUTES

5.1

Mediation

The parties agree to negotiate in good faith to resolve any disputes, disagreements, questions, claims, or similar matters in regard to this Agreement or any matter in regard to the relationship between the parties. If such matters cannot be resolved by negotiations between the parties, the parties agree to attempt to mediate any dispute arising between them by engaging an attorney, acceptable to both parties, who specializes in contract mediation. The parties shall bear their own costs and share the cost of the mediator. If mediation does not resolve the dispute, then either party may seek relief in a court of competent jurisdiction. No party shall be precluded, however, from seeking injunctive relief to maintain the status quo or prevent irreparable harm.

EFFECTIVE DATE; TERMINATION; SURVIVAL

(a) This Agreement shall continue indefinitely from the effective date set forth above (the “Effective Date”).

(b) Either party may terminate this Agreement upon giving written notice to the other party of a breach of its obligations under this Agreement, if a cure of such breach is not completed within sixty (60) days after receipt of written notice.

(c) The provisions of this Agreement that contemplate performance after the execution of this Agreement and the obligations of the Parties not fully performed at the execution of this Agreement shall survive the execution of this Agreement until fully performed or excused.

OTHER PROVISIONS

(a) ECPN hereby appoints LOGISTICA as its exclusive agent for iron processing and logistics, ore transfer services at inland terminals and sea ports, handling, trucking, rail transportation, and as freight provider with its own equipment and resources and/or subcontracting third parties, all with respect to the transport of iron ore from the El Capitan mine site in Lincoln County, NM to the exporting port or final destinations designated by a ECPN buyer.

(b) Each party to this transaction has conducted due diligence as to the other’s ability to perform hereunder as well as the projected price points for product, logistical costs, anticipated profits and similar material matters. No warranties, express or implied, are created by such due diligence.

(c) The parties are, with respect to their involvement in this Agreement, independent contractors and separate legal entities; no partnership, joint venture or other arrangement is established or contemplated by this Agreement.

(d) No amendment, modification, or supplement of this Agreement shall be valid or binding upon any party unless in writing and duly executed by an authorized officer of each party. This Agreement constitutes the complete, final and exclusive understanding and contract between the parties.

(e) The obligations under this Agreement are not assignable absent written agreement of the parties and there are no intended third party beneficiaries to this Agreement unless both parties agree to in writing.

(f) This Agreement is binding upon and inures to the benefit of the parties and their respective successors and permitted assigns, including, without limitation, any person or entity that purchases all or substantially all of the assets, stock or ownership interests, however denominated, of either party. If any provision of this Agreement is held invalid for any reason, the remaining provisions of this Agreement shall remain valid and enforceable and the parties shall substitute for the invalid provision a valid provision which most closely approximates the intent and economic effect of the invalid provision.

(g) The failure of either party to require performance of any provision of this Agreement shall not affect the right to require such performance at a subsequent time. The waiver by either party of a breach of any provision hereof shall not be taken as a waiver of the provision itself. This Agreement shall not be amended or limited by any course of performance or course of dealing.

(h) This Agreement, which includes any exhibits hereto, constitutes the entire agreement of the parties, superseding all prior written or oral agreements or understandings between the parties with respect to the subject matter hereof. Each party acknowledges that no representation or statement, and no understanding or agreement, has been made, or exists that is not provided for in this Agreement, and that in entering into this Agreement neither party has relied on anything done or said or on any presumption in fact or in law (a) with respect to this Agreement, or to the duration, termination, or renewal of this Agreement, or with respect to the relationship between the parties, other than as expressly set forth in this Agreement; or (b) that in any way tends to change or modify the terms, or any of them, of this Agreement or to prevent this Agreement becoming effective; or (c) that in any way affects or relates to the subject matter hereof. The parties also acknowledge that the terms and conditions of this Agreement, and each of them, are reasonable and fair and equitable.

(i) This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures or scanned signatures in PDF format shall, for all purposes, be treated as originals.

(j) All notices, communications and deliveries under this Agreement must be made in writing, sent by certified mail, return receipt requested, or by e-mail, and will be given and made to the respective parties at their respective principal office addresses. Either party may change the address for notice under this paragraph by sending notice, compliant with this paragraph, describing any change in address.

(k) The parties acknowledges that they may during the term of this Agreement or in the discharge of their obligations hereunder exchange with one another certain non-public confidential or proprietary information, whether disclosed to or accessed by either party, whether oral or in written, electronic, or other form or media, including without limitation: (i) all information concerning past, present, and future business affairs, including customer information, finances, supplier information, products, services, and business, marketing, development, sales, and other commercial strategies; (ii) unpatented inventions, ideas, methods, discoveries, trade secrets, know-how, and other confidential intellectual property; (iii) all designs, specifications, documentation, components, source code, object code, images, screen shots, schematics, drawings, protocols. processes, and other visual depictions, in whole or in part, of any of the foregoing; (iv) product information, database structure, processes, techniques, know-how, designs, plans, software (in source or object code), and any other technical, business, financial, or customer information; and (v) any third-party confidential information included with, or incorporated in, any information provided by or to either party. The parties shall hold such information in strict confidence, using such information only as necessary to accomplish their respective obligations under this Agreement and for no other purpose, and shall use the same care and discretion as they use with their own confidential information, but no less than reasonable care, to avoid disclosure, publication, or dissemination.

AGREED TO, APPROVED and EXECUTED as of the date first above written by:

EL CAPITAN PRECIOUS METALS, INC.

By:	/s/ Charles C. Mottley
	Charles C. Mottley, CEO and President

LOGISTICA U.S. TERMINALS, LLC

By:	/s/ Evaristo Perez
	Evaristo Perez, Vice President

APPENDIX A

IRON ORE PROCESSING AGREEMENT

THIS IRON ORE PROCESSING AGREEMENT (“Agreement”) is made effective as of 28 ^th day of February, 2014, by and between Logistica U.S. Terminals, LLC (“LOGISTICA”), with its principal office at 8700 Old Highway 48, Brownsville, Texas 78521 and El Capitan Precious Metals, Inc. (“ECPN”), with its principal office at 8390 Via de Ventura, Suite F-110, Scottsdale, Arizona 85258- 3189.

RECITALS

WHEREAS, ECPN is entering into a contract (the “Purchase Contract”) to sell a minim urn of [***] dry metric tons of iron ore per month from its El Capitan mine in Lincoln County, New Mexico (the “Mine”) to GLENCORE INTERNATJONAL AG (“Glencore” or the “Buyer”);

WHEREAS, LOGTSTICA has agreed to provide turnkey iron ore processing and related services (the “Services”) to ECPN on the terms and conditions described herein for the purposes of fulfilling ECPN’s obligations under the Purchase Contract; and

NOW, THEREFORE, for and in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

SERVICES

1.1

Ore Processing Services; Equipment

LOGISTICA shall deliver iron ore processing equipment, including crushers, screeners and magnetic separators, to the El Capitan mine in New Mexico and, in exchange for the compensation set forth in this Agreement, shall process to contract specification, stockpile and load for delivery iron ore that ECPN is to provide monthly under the Purchase Contract. LOGISTICA agrees to use its best efforts to process and deliver as much iron ore as may be reasonably practicable during the term of the Purchase Contract; said best efforts shall target, but cannot guarantee, processing of the minimum required quantity of iron ore product deliverable under the Purchase Contract, or more, if reasonably practicable under accepted industry standards applicable to the mine and equipment. Further, it is understood that LOGISTICA’s ability to process and deliver product consistent with the quantities provided for in the Purchase Contract shall be further conditioned upon the timely and competent performance of subcontractors charged with processing tailings as well as the mine’s quantity and quality of iron ore product. In addition, LOGISTICA shall load into containers and transport certain quantities of tailings from the processed head ore at the El Capitan mine, as mutually agreed between ECPN and LOGISTICA, after consultation with David Davidson.

1.2

Record-Keeping; Reporting

LOGISTICA acknowledges the importance of record-keeping at mine locations and agrees to assist ECPN and provide such detailed information as may be necessary for ECPN to perform all record-keeping and filing duties required of a mine operator in the State of New Mexico, USA or pursuant to any federal requirement. These duties include, but are not limited to (i) recording and maintaining log books with respect to production and equipment operations; and (ii) filing any reports or statements required by applicable permits, regulations or otherwise. LOGISTICA shall retain copies of all such records, filings and related documentation if requested by ECPN, the ownership of which is retained by ECPN. In addition, LOGISTICA shall supply all trucking weight receipts on a weekly basis to ECPN.

1.3

Project Management; Sub-Contractors

(a) LOGISTICA agrees to act as ECPN’s turn-key contractor for all ECPN iron ore processing and delivery operations at the Mine. As ECPN’s General Contractor for the Services, LOGISTICA shall contract with one or more sub-contractors to provide the Services described in this Agreement.

(b) LOGISTICA shall require that every sub-contractor enter into a written contract with LOGISTICA in which the sub-contractor confirms and agrees to the following:

(i) All individuals hired by the sub-contractor to provide Services at the Mine shall be employees of the sub-contractor or individuals under written contract with the subcontractor.

(ii) It is obligated to review employee and contractor identification documents, ensure the documents are genuine and certify individuals are eligible to work in the United States.

(iii) It shall comply with all employment-related laws including, but not limited to, those laws regarding wages and hours of employment, occupational safety and health and sanitation requirements.

(iv) It shall comply with all relevant local, state and/or federal mining, environmental, reclamation, and other applicable statutes and regulations.

(v) Where possible to include in the contract, the subcontractor is in privity of contract with ECPN and that ECPN has the right to enforce the provisions of the subcontract directly against the subcontractor.

(c) LOGISTICA shall use due diligence to confirm that any subcontractor engaged to carry out any part of this Agreement has in place procedures and measures for the safety of persons and property at and around the Mine in compliance with OSHA requirements and all other applicable federal, state and local statutes, rules, regulations and orders applicable to providing the Services.

(d) LOGISTICA acknowledges that ECPN is obligated to supply iron ore on a regular basis as required under the Purchase Contract. ECPN retains its rights as property owner to process ore if for any reason LOGISTICA fails to process ore as provided herein.

(e) LOGISTICA shall use due diligence to confirm that any subcontractor engaged to carry out any part of this Agreement is competent, is able to carry out its responsibilities, and is financially sound.

LICENSES; PERMITS; COMPLIANCE WITH RELEVANT LAWS

LOGISTICA shall use reasonable due diligence to confirm that its sub-contractors have and keep current all licenses, permits, qualifications, and approvals of whatsoever nature which are legally required for such sub-contractors to provide the Services agreed to herein.

PAYMENT

(a) ECPN agrees to pay LOGISTICA US$ [***] per metric ton of iron ore that is processed per the Purchase Contract specifications and purchased by the Buyer (the “Fee”) as payment for the full performance of its obligations hereunder.

(b) In the event the specifications for the processed iron ore materially change, the parties will negotiate in good faith and determine a reasonable adjustment to the Fee to reflect the new specifications.

(c) The Fee is payable to LOGISTICA immediately upon the availability of funds in the ECPN account in an amount sufficient to pay the Fee and the logistics and shipping costs of the iron ore to which the Fee relates.

(d) No taxes will be withheld from Fees paid to LOGISTICA. LOGISTICA is solely responsible for paying all required taxes and agrees to defend, indemnify and hold harmless ECPN from any and all damages, claims and expenses, including attorney’s fees and incurred by ECPN as a result of the failure of LOGISTICA or any of its sub-contractors to withhold or pay required taxes.

(e) As additional compensation to be paid by ECPN for services rendered in arranging this Iron Ore Processing Agreement with LOGISTICA, ECPN shall issue to Luis Estrada four million (4,000,000) shares of S-8 stock of ECPN. Such stock shall be issued as soon as reasonably possible after execution of this Iron Ore Processing Agreement.

STANDARD OF PERFORMANCE

LOGISTICA and its sub-contractors shall perform all the Services in a workmanlike manner and in conformance with the reasonable commercial standards normally observed by competent contractors providing similar services.

INSURANCE REQUIREMENTS

(a) LOGISTICA shall cause its sub-contractors to procure, and maintain during the existence of this Agreement, reasonable insurance coverage for the activities which they are undertaking.

(b) ECPN shall be included as an Additional Insured under the General Liability and Umbrella/Excess Liability policies. Prior to commencing the Services, any subcontractor now or in the future, shall furnish Certificates of Insurance evidencing such insurance coverage as applicable and listing ECPN as Additional Insured and as the Certificate Holder with copies thereof to be forwarded to ECPN.

INJURIES

LOGISTICA acknowledges its obligation to cause its subcontractors to obtain, appropriate insurance coverage for employees and independent contractors for any injuries sustained while providing Services under this Agreement.

INDEPENDENT CONTRACTOR

In providing the Services as described in this Agreement, LOGISTICA shall retain sole and absolute discretion carrying out its activities and responsibilities as the contractor under this Agreement. All terms of employment of any subcontractor’s workers, including hours, wages, working conditions, discipline, hiring and discharging or any other term of employment or requirements of law shall be determined by the respective subcontractor. This Agreement is not intended to and shall not be interpreted to create any employment, partnership, joint venture or other business association between ECPN and LOGISICA.

INDEMNITY AND DAMAGES

(a) ECPN is relying upon LOGISTICA to provide the Services which will allow ECPN to perform its Purchase Contract with Glencore. LOGISTICA is relying upon ECPN to provide operating permits, environmental permits, mining permits, land and mineral rights and a Purchase Contract. Therefore in justifiable, detrimental reliance upon the fulfillment of these respective obligations to each other, LOGISTICA and ECPN hereby expressly agree to mutually indemnify, defend and hold each other harmless with respect to any claim, lawsuit or other adverse action by Glencore or a third party which relates to the Services and/or products to be provided by them under this Agreement. Any attorney selected by either party to defend the other must be reasonably satisfactory to the other, in no event shall either party be liable or obligated in any manner for any special, incidental, exemplary or consequential damages of any kind (including, without limitation, lost profits), even if such party has been informed of the possibility of any such damages in advance.

(b) ECPN expressly acknowledges that LOGISTICA’s performance under this Iron Ore Processing Agreement is dependent upon the diligent, competent and timely performance of numerous independent subcontractors, accordingly, ECPN releases LOGISTICA and holds it harmless of and from any claim for indemnity or damage, of whatever nature, arising from or attributable to the acts, omissions, negligence or failures of any subcontractor or vendor providing services under, or required/contemplated under, this agreement. Logistica agrees, to the extent economically feasible and reasonably available, to require that subcontractors and vendors providing services under this Agreement have in force and effect insurance and/or bonding to cover claims against LOGISTICA and/or ECPN for acts, omissions, negligence or failures attributable to said subcontractors and vendors.

EFFECTIVE DATE; TERMINATION; SURVIVAL

(a) This Agreement shall continue indefinitely from the effective date set forth above (the “Effective Date”).

(c) Neither party shall bear any liability hereunder should the deliveries under the Purchase Contract not commence. In such event, this Agreement shall be terminated without fault to either party unless the parties agree otherwise in writing.

(d) ECPN may terminate this Agreement without fault if all or part of the funds secured by LOGISTICA for the purposes of this Agreement are not made available to ECPN. If this provision is invoked, ECPN shall be liable for work already completed by LOGISTICA at contracted rates to the extent it has received payment therefore.

(e) The provisions of this Agreement that contemplate performance after the execution of this Agreement and the obligations of the Parties not fully performed at the execution of this Agreement shall survive the execution of this Agreement until fully performed or excused.

10.

DISPUTES

10.1

Mediation

The parties agree to negotiate in good faith to resolve any disputes, disagreements, questions, claims, or similar matters in regard to this Agreement or any matter in regard to the relationship between the parties. If such matters cannot be resolved by negotiations between the parties, the parties agree to attempt to mediate any dispute arising between them by engaging an attorney, acceptable to both parties, who specializes in contract mediation. The parties shall bear their own costs and share the cost of the mediator. If mediation does not resolve the dispute, then either party seek relief in a court of competent jurisdiction. No party shall be precluded, however, from seeking injunctive relief to maintain the status quo or prevent irreparable harm.

11.

OTHER PROVISIONS

11.1

Amendment, Waiver and Severability.

No amendment, modification or supplement of any provision of this Agreement will be valid or effective unless made in writing and signed by a duly authorized officer of each party. No provision of this Agreement will be waived by any act, omission or knowledge of a party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving party. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be effective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

11.2

Assignment.

This Agreement may not be assigned in whole or in part without the prior written approval of the other party. No rights or remedies are conferred by this Agreement other than to the parties and their respective successors and permitted assigns.

11.3

Notice.

Any notice, communication, request, reply or advice (collectively, “Notice”) provided for or permitted by this Agreement to be made or accepted by any party must be in writing. Unless otherwise set forth in this Agreement. Notice may be given or served by (a) personal delivery or by commercial courier, (b) United States mail, postage pre-paid, to the addresses set forth above, (c) United States mail, postage pre-paid, certified, return receipt requested, to the addresses set forth above, (d) email transmission, evidenced by confirmed receipt or acknowledgement of recipient, or (e) depositing the same into custody of a nationally and/or internationally recognized overnight delivery service. Notice deposited in the United States mail in the manner herein above described shall be effective on the third (3rd) business day after such deposit. Unless otherwise set forth in this Agreement, Notice given in any other manner shall be effective only if and when received by the Party to be notified. The Parties shall have the right from time to time to change their respective addresses, and each shall have the right to specify as its address any other address by at least five (5) days’ written Notice to the other Party.

11.4

Survival

The provisions of this Agreement that contemplate performance after the execution of this Agreement and the obligations of the Parties not fully performed at the execution of this Agreement shall survive the execution of this Agreement until fully performed or excused.

11.5

Third Party Beneficiaries.

Except as otherwise expressly provided in this Agreement, the Parties do not intend by any provision of this Agreement to confer any right, remedy or benefit upon any third party (express or implied), and no third party shall be entitled to enforce or otherwise shall acquire any right, remedy or benefit by reason of this Agreement.

11.6

Entire Agreement; Counterparts.

This Agreement is the complete, final and exclusive understanding and agreement of the parties, and cancels and supersedes any and all prior negotiations, correspondence and agreements, whether oral or written, between the parties with respect to the subject matter of this Agreement. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile signatures or scanned signatures in PDF format shall, for all purposes, be treated as originals.

IN WITNESS WHEREOF , the Parties have executed this Agreement as of the date first above written.

EL CAPITAN PRECIOUS METALS, INC.

By:	/s/ Charles C. Mottley
	Charles C. Mottley, CEO and President

LOGISTICA U.S. TERMINALS, LLC

By:	/s/ Evaristo Perez
	Evaristo Perez, Vice President

APPENDIX B

SPECIAL POWER OF ATTORNEY
APPOINTMENT AS SIGNATORY ON ACCOUNT

SPECIAL POWER OF ATTORNEY

I, Charles C. Mottley, in my capacity as President and CEO of El Capitan Precious Metals, Inc., an Arizona corporation (“ECPN”), hereby appoint Evaristo Perez, a resident of Texas, as my attorney-in-fact to act in my capacity, as a co-signatory on the ECPN account referenced below, and to do any and all of the following:

To act as a co-signatory with me with respect to a bank account established in the name of ECPN with the following bank: __________________________

To engage in all banking activities with respect to such account with full corporate authority to (i) sign checks and institute bank wire transfers on behalf of ECPN, and (ii) have access to all account information and receive duplicate copies of all bank statements regarding the ECPN account.

To communicate with bank personnel on behalf of ECPN and receive information with respect to collection and processing of payments due ECPN via Letter of Credit or otherwise.

The rights, powers, and authority of my attorney-in-fact to exercise any and all of the rights and powers herein granted shall commence and be in full force and effect as of the date hereof and shall remain in full force and effect until one year from the date hereof unless specifically extended or rescinded earlier by either party. Such rights hereby granted with respect to the account shall be in the nature of co-signatory and shall not affect the rights of the undersigned.

Dated: February 28, 2014



By:	/s/ Charles C. Mottley
	Charles C. Mottley, President and CEO
	El Capitan Precious Metals, Inc.

APPENDIX C

EL CAPITAN PRECIOUS METALS, INC.

WIRE TRANSFER INSTRUCTIONS

[***]

APPENDIX D

LOGISTICA U.S. TERMINALS LLC

WIRE TRANSFER INSTRUCTIONS

[***]

EXHIBIT 31.1

RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Charles C. Mottley, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of El Capitan Precious Metals, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 14, 2014

	By:	/s/ Charles C. Mottley
		Charles C. Mottley
		President, Chief Executive Officer and Director

EXHIBIT 31.2

RULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, John F. Stapleton, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of El Capitan Precious Metals, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 14, 2014

	By:	/s/ John F. Stapleton
		John F. Stapleton
		Chief Financial Officer and Director

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of El Capitan Precious Metals, Inc. (the “Company”) on Form 10-Q for the six-month period ended March 31, 2014, filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in material respects, the financial condition and results of operations of the Company, as of, and for the periods presented in the Report.

Date: May 14, 2014
	/s/ Charles C. Mottley
	Charles C. Mottley Chief Executive Officer, President and Director


	/s/ John F. Stapleton
	John F. Stapleton Chief Financial Officer and Director