Cannot reset Keychain Access

I am a newbie to Apple and forgot my password. Tried following the recommended steps and have ended up with a Keychain access issue.

Have reboot the Mini Mac and held "Command +R" and completed a verify and then a repair on the verify. Reboot the system and on boot up I am still have a keychain issue.

OS X wants to use the "local items" keychain.

When I type in my password nothing happens and I have to cancel this. Once the system boots up I also get the following

A keychain cannot be found to store registrationV1

Need assistance PLEASE

Cheers

Marty