Shoshone Silver/Gold Mining (SHSH) 10QSB 2004 Q2 Quarterly report (small business)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2004

OR

[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________ TO ______________.

Commission File Number 000-21623

SHOSHONE SILVER MINING COMPANY
(Exact name of registrant as specified in its charter)

Idaho	82-0304993
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1176 Big Creek Road, Ste E-106, Kellogg, ID 83837
(Address of principal executive offices) (Zip Code)

(208) 556-1056
(Registrant’s telephone number, including area code)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [] No [ x ]

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [] No []

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

Class	Outstanding as of June 30, 2004
Common Stock ($0.10 par value)	17,393,797

Transitional Small Business Disclosure Format (check one): Yes [ x ] No []

FORM 10-QSB
For the Quarter Ended June 30, 2004

TABLE OF CONTENTS

PART I - Financial Information		1
Item 1 -	Financial Statements (Unaudited)	1
	Balance Sheets	1
	Statements of Operations and Comprehensive Income	2
	Statements of Cash Flows	3
	Statements of Stockholders’ Equity	4
	Condensed Notes to Financial Statements	5
Item 2 -	Management’s Discussion and Analysis or Plan of Operation	7
Item 3 -	Controls and Procedures	8
PART II - Other Information		8
Item 4 -	Legal Proceedings	8
Item 5 -	Changes in Securities and Use of Proceeds	8
Item 6 -	Defaults Upon Senior Securities	8
Item 7 -	Submission of Matters to a Vote of Security Holders	8
Item 8 -	Other Information	9
Item 9 -	Exhibits and Reports on Form 8-K	9
Signatures		10

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PART I - Financial Information

Item 1 - Financial Statements

We have provided the following information to our certifying independent accountants. We are filing this information prior to the completion of the accountant's services under Regulation S-X Article 10. We expect to file amended filings after these services are completed to correct this departure from the requirements of Regulation S-X Article 10.

Shoshone Silver Mining Company
Balance Sheets

					December
		June 30,			31,
		2004			2003
		(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	90,599		$	17,403
Prepaid Expenses		18,215			--
Other current assets		46,163			5,100
Total current assets		154,977			22,503
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment		1,636,815			1,636,815
Accumulated Depreciation		(1,072,241	)		(1,056,525	)
Total property, plant and equipment		564,574			580,290
MINERAL AND MINING PROPERTIES		1,116,271			311,218
OTHER ASSETS
Note Receivable		20,225			--
Investments		1,493,211			1,454,159
TOTAL ASSETS	$	3,349,258		$	2,368,170
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts Payable	$	635		$	6,177
Accrued Expenses and Other Liabilities		542,500			--
Short-Term Loan		1,200			17,100
Total current liabilities		544,335			23,277
Commitments and contingent liabilities
STOCKHOLDERS’ EQUITY
Common stock, $0.10 par value; 20,000,000 shares authorized; 17,393,797 and
15,031,940 shares issued and outstanding, respectively		1,739,380			1,503,194
Additional paid-in capital		2,944,167			2,403,306
Treasury stock		(39,246	)		(53,358	)
Stock Options		12,221			12,221
Accumulated Deficit		(3,021,736	)		(2,848,932	)
Accumulated other comprehensive income		1,170,137			1,328,462
Total stockholders’ equity		2,804,923			2,344,893
Total liabilities and stockholders’ equity	$	3,349,258		$	2,368,170

See accompanying condensed notes to interim financial statements.

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Shoshone Silver Mining Company
Statements of Operations and Comprehensive Income
(Unaudited)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2004			2003			2004			2003
REVENUES
Sales	$	--		$	--		$	638		$	--
Total Revenues		--			--			638			--
COST OF REVENUES		--			--			--			--
GROSS PROFIT		--			--			638			--
OPERATING EXPENSES
General and administrative		47,994			2,862			118,053			3,336
Professional fees		3,739			9,995			15,749			10,750
Depreciation		7,858			8,743			15,716			17,487
Mining expenses		21,207			--			43,152			--
Total Operating Expenses		80,798			21,600			192,670			31,573
LOSS FROM OPERATIONS		(80,798	)		(21,600	)		(192,032	)		(31,573	)
OTHER INCOME (EXPENSES)
Net gain (loss) on sale of investments		--			--			13,934			--
Lease income		--			3,000			5,100			5,000
Dividend and interest income		172			--			193			6
Net gain (loss) on sale of marketable securities		--			--			--			199
Total Other Income (Expenses)		172			3,000			19,227			5,209
NET LOSS		(80,626	)		(18,600	)		(172,805	)		(26,364	)
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding income (loss) on investments		(755,501	)		--			(158,325	)		--
NET COMPREHENSIVE INCOME (LOSS)	$	(836,127	)	$	(18,600	)	$	(331,130	)	$	(26,364	)
INCOME (LOSS) PER COMMON SHARE – BASIC
AND DILUTED	$	(0.053	)	$	(0.002)		$	(0.021	)	$	(0.002	)
WEIGHTED AVERAGE NUMBER OF COMMON
STOCK SHARES OUTSTANDING, BASIC AND
DILUTED		15,888,817			11,298,026			15,888,817			11,298,026

See accompanying condensed notes to interim financial statements.

2

Shoshone Silver Mining Company
Statements of Cash Flows
(Unaudited)

		Six Months Ended
		June 30,
		2004			2003
Cash flows from operating activities:
Net loss	$	(172,805	)	$	(26,364	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,716			17,487
Net (gain) loss on sale of investments		(13,934	)		(4	)
Net (gain) loss on sale of marketable securities		--			(199	)
Common stock issued for services		26,250			--
Common stock issued on contract for mining properties		(542,500	)		--
Change in assets and liabilities:
Prepaid Expenses		(18,215	)		--
Other current assets		(41,063	)		(102,000	)
Accounts Payable		(5,542	)		1,735
Accrued expenses and other liabilities		542,500			400
Net cash provided (used) by operating activities		(209,593	)		(108,945	)
Cash flows from investing activities:
Purchases of investments		(203,825	)		--
Proceeds from sales of investments		20,382			--
Purchases of mining properties		(105,053	)		--
Purchase of marketable securities		--			(1,967	)
Net cash provided (used) by investing activities		(288,496	)		(1,967	)
Cash flows from financing activities:
Common stock issued for cash		651,650			--
Advances on short-term loan		1,200			27,000
Commissions paid on private placement offering		(64,465	)		--
Repayment of short-term loan		(17,100	)		(5,000	)
Net cash provided (used) by financing activities		571,285			108,200
Net increase (decrease) in cash		73,196			(2,712	)
Cash, beginning of period		17,403			7,933
Cash, end of period	$	90,599		$	5,221
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	--		$	--
Income taxes	$	30		$	--
Noncash investing and financing activities:
Common stock issued for mining properties	$	157,500		$	--
Treasury stock issued for note receivable	$	20,225		$	--

See accompanying condensed notes to interim financial statements.

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Shoshone Silver Mining Company
Statements of Stockholders’ Equity
(Unaudited)

	Common Stock
	Number		Amount		Additional			Accumulated			Treasury			Stock		Accumulated
	of Shares				Paid-in			Deficit			Stock			Options		Other			Total
					Capital											Comprehensive			Stockholders’
																Income			Equity
Balance, December 31, 2002	10,879,329	$	1,087,933	$	2,582,084		$	(2,749,640	)	$	(53,358	)	$	12,221	$	--		$	879,240
Stock issued for cash at $0.03 per share	2,902,778		290,278		(204,278	)													86,000
Issuance of stock for services at a price of $0.10 per share	620,833		62,083																62,083
Issuance of stock for mining properties at $0.15 per share	510,000		51,000		25,500														76,500
Stock issued for cash at a price of $0.10 per share	119,000		11,900																11,900
Unrealized gain on available for sale securities																1,328,462			1,328,462
Net loss for year ending December 31, 2003								(99,292	)										(99,292	)
Balance, December 31, 2003	15,031,940		1,503,194		2,403,306			(2,848,932	)		(53,358	)		12,221		1,328,462			2,344,893
Stock issued for cash at $0.35 per share	1,861,857		186,186		465,464														651,650
Issuance of stock for services at a price of $0.15 per share	20,000		2,000		1,000														3,000
Issuance of stock for mining properties at $0.35 per share	450,000		45,000		112,500														157,500
Issuance of stock for services at a price of $0.10 per share	5,000		500																500
Issuance of stock for services at a price of $0.35 per share	25,000		2,500		6,250														8,750
Issuance of treasury stock for promissory note					10,113						10,112								20,225
Issuance of treasury stock for services at a price of $0.35 per share					10,000						4,000								14,000
Commissions paid on private placement offering					(64,465	)													(64,465	)
Unrealized gain (loss) on available for sale securities																(158,325	)		(158,325	)
Net loss for six months ending June 30, 2004								(172,805	)										(172,805	)
Balance, June 30, 2004	17,393,797	$	1,739,380	$	2,944,168		$	(3,021,737	)	$	(39,246	)	$	12,221	$	1,170,137		$	2,804,923

See accompanying condensed notes to interim financial statements.

4

Shoshone Silver Mining Company
Condensed Notes to the Financial Statements

1.	Basis of Presentation:
	The foregoing unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2003. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented.
	The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of Shoshone Silver Mining Company’s (“Shoshone’s”) financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of Shoshone’s financial position and results of operations.
2.	Summary of Significant Accounting Policies:
	This summary of significant accounting policies is presented to assist in understanding Shoshone’s financial statements. The financial statements and notes rely on the integrity and objectivity of the Company’s management. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
	Estimates:
	The preparation of 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

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3.	Investments Shoshone’s securities investments are classified as trading securities and are recorded at fair value as of the balance sheet date, with the change in fair value during the period included in earnings. The fair value of any investments in restricted stock as discounted 35%.
	The investments are summarized as follows:

		June 30,		December
		2004		31, 2003
Fair value of investments	$	1,493,211	$	1,454,159
Gross unrealized gain		1,170,137		1,328,462
Cost	$	323,074	$	125,697

4.	Commitments and Contingencies Shoshone is engaged in mineral mining and may become subject to certain liabilities as they relate to environmental cleanup of mining sites or other environmental restoration procedures as they relate to mineral mining and the operation thereof.
	Although the mineral exploration and mining industries are inherently speculative and subject to complex environmental regulations, Shoshone is unaware of any pending litigation or of any specific past or prospective matters which could impair the value of its mining claims.

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Item 2 - Management’s Discussion and Analysis or Plan of Operation

SHOSHONE SILVER MINING COMPANY
Comparison of the Three and Six Months Ended June 30, 2004 and 2003

     This report contains forward-looking statements. For a discussion about such statements, including the risks and uncertainties inherent therein, see “Forward-Looking Statements.” Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and Notes presented elsewhere in this report.

General

     Shoshone Silver Mining Company (“Shoshone”) was incorporated under the laws of the State of Idaho on August 4, 1969, under the name of Sunrise Mining Company and is engaged in the business of mining. On January 22, 1970, the Company’s name was changed to Shoshone Silver Mining Company. The Company’s year end is December 31

Results of Operations

     Overview. Shoshone recorded a net loss of $81 thousand, or $0.005 per diluted share, for the three months ended June 30, 2004, compared with a net loss of $19 thousand, or $0.002 per diluted share, for the three months ended June 30, 2003. Shoshone recorded a net loss of $173 thousand, or $0.01 per diluted share, for the six months ended June 30, 2004, compared with a net loss of $26 thousand, or $0.002 per diluted shares, for the six months ended June 30, 2004. The increase in net losses for both periods reflected an increase operating expenses partially offset by increases in other income.

     Other Income.Other income was $0.2 thousand and $3 thousand for the three months ended June 30, 2004 and 2003, respectively. Other income was $19 thousand and $5 thousand for the six months ended June 30, 2004 and 2003, respectively. The increase was primarily due to net gain realized on sale of investments.

     Operating Expenses. Operating expenses were $81 thousand and $22 thousand for the three months ended June 30, 2004 and 2003, respectively. Operating expenses were $193 thousand and $32 thousand for the six months ended June 30, 2004 and 2003, respectively. The higher level of operating expenses was primarily a result of increased general and administrative expenses, professional fees, and mining expenses.

Financial Position

     Assets. At June 30, 2004, Shoshone’s assets were $3.3 million, up $0.9 million from $2.4 million at December 31, 2003.

     Investments. Shoshone’s investment portfolio at June 30, 2004 was $1.5 million, an increase of $0.0 million from the December 31, 2003 balance of $1.5 million.

     Mineral and Mining Properties. At June 30, 2004, mineral and mining properties were $1.1 million, up $805 thousand from $311 thousand at December 31, 2003. The increase was primarily due to acquisitions of three mining properties during the first quarter of 2004.

     Accrued Expenses and Other Liabilities. Accrued Expenses and Other Liabilities increased $543 thousand to $543 thousand at June 30, 2004 from $0.0 thousand at December 31, 2003, primarily due to the accrual for stock to be issued over a contracted period of time for the acquisition of mining properties.

Liquidity and Sources of Funds

     During the six months ended June 30, 2004, cash used in investing activities consisted primarily of the purchase of available-for-sale securities in the investment portfolio and mining properties, partially offset by proceeds from sale of investments. During the same period, cash provided by financing activities consisted primarily of common stock issuances for cash, net of private placement commission, partially offset by repayment of short-term loan.

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Capital Resources

     Shoshone’s total stockholders’ equity was $2.8 million at June 30, 2004 compared with $2.3 million at December 31, 2003. The increase in total stockholders’ equity was primarily due to common stock issued for cash through a private placement offering and other common stock issued for services and acquisition of mining properties. Stockholders’ equity was 83.7% of total assets at June 30, 2004 compared with 99.0% at December 31, 2003.

     At June 30, 2004, Shoshone had an unrealized gain of $1.2 million, net of related income taxes, on investments classified as available for sale. At December 31, 2003, Shoshone had an unrealized gain of $1.3 million, net of related income taxes, on investments classified as available for sale. Fluctuations in prevailing market values continue to cause volatility in this component of accumulated comprehensive income or loss in stockholders’ equity and may continue to do so in future periods.

Forward-Looking Statements

     From time to time, Shoshone and its senior managers have made and will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are contained in this report and may be contained in other documents that Shoshone files with the Securities and Exchange Commission. Such statements may also be made by Shoshone and its senior managers in oral or written presentations to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Also, forward-looking statements can generally be identified by words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “seek,” “expect,” “intend,” “plan” and similar expressions.

Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. These statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made. There are a number of factors, many of which are beyond our control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements.

Item 3 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     Shoshone’s principal executive officer and principal financial officer are responsible for establishing and maintaining disclosure controls and procedures for Shoshone. Such disclosure controls and procedures are designed to ensure that material information relating to Shoshone are made known to the officers who must certify that they have evaluated the effectiveness of the disclosure controls and procedures within ninety days prior to the filing of the quarterly report. Shoshone’s certifying officers have concluded that as of June 30, 2004, the material information they use in evaluating Shoshone’s performance and operations has been effectively provided by Shoshone’s disclosure controls and procedures.

Changes in Internal Controls

     There have not been any significant changes in Shoshone’s internal controls or in other factors that could significantly affect these controls subsequent to the date of the certifying officers’ evaluation. The certifying officers are not aware of any significant deficiencies or material weaknesses, therefore no corrective actions were taken.

PART II – Other Information

Item 4 - Legal Proceedings

None.

Item 5 - Changes in Securities and Use of Proceeds

Not applicable.

Item 6 - Defaults Upon Senior Securities

Not applicable.

Item 7 - Submission of Matters to a Vote of Security Holders

8

Not applicable.

Item 8 - Other Information

Not applicable.

Item 9 - Exhibits and Reports on Form 8-K

(a)	Exhibit No.	Exhibit
	3.1	Articles of Incorporation of Shoshone. (*)
	3.2	Bylaws of Shoshone. (*)
	4.1	Reference is made to Exhibits 3.1 and 3.2.
	4.2	The Registrant has no outstanding long-term debt.
	31.1	Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Chief Executive Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b)	Reports on Form 8-K. During the quarter ended June 30, 2004, there were no reports filed on Form 8-K.

* Incorporated by reference to the Company’s Registration Statement on Form 10-SB, filed with the Commission on February 15, 2001, File No. 000-31965.

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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.

	SHOSHONE SILVER MINING
	COMPANY
		(Registrant)
August 2, 2006	By:	/s/ Lex Smith
Date		Lex Smith
		President
		and Chief Executive Officer
August 2, 2006	By:	/s/ Carol Stephan
Date		Carol Stephan
		Secretary/Treasurer
		and Chief Financial Officer

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