Timberline Resources (TLRS) 10-Q 11 Feb 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Dec. 31, 2013	Feb. 11, 2014
Document and Entity Information	'	'
Entity Registrant Name	'Timberline Resources Corp.	'
Document Type	'10-Q	'
Document Period End Date	31-Dec-13	'
Amendment Flag	'false	'
Entity Central Index Key	'0001288750	'
Current Fiscal Year End Date	'--09-30	'
Entity Common Stock, Shares Outstanding	'	74,868,938
Entity Filer Category	'Smaller Reporting Company	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Well-known Seasoned Issuer	'No	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

TIMBERLINE_RESOURCES_CORPORATI

TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES (An Exploration Stage Company) CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2013	Sep. 30, 2013
CURRENT ASSETS:	'	'
Cash	$227,799	$824,919
Prepaid expenses and other current assets	32,605	30,151
Joint venture receivable	33,833	53,586
Current portion of prepaid drilling services	220,000	'
TOTAL CURRENT ASSETS	514,237	908,656
PROPERTY, MINERAL RIGHTS AND EQUIPMENT	14,121,115	14,037,784
OTHER ASSETS:	'	'
Prepaid drilling services, net of current portion	440,000	660,000
Investment in joint venture	642,450	642,450
Restricted cash	639,422	639,422
Deposits and other assets	4,500	4,500
TOTAL OTHER ASSETS	1,726,372	1,946,372
TOTAL ASSETS	16,361,724	16,892,812
CURRENT LIABILITIES:	'	'
Accounts payable	115,904	204,897
Accrued expenses	179,587	213,292
Accrued payroll, benefits and taxes	51,229	52,444
TOTAL CURRENT LIABILITIES	346,720	470,633
LONG-TERM LIABILITIES:	'	'
Common stock payable	60,000	'
Asset retirement obligation	127,339	125,823
TOTAL LONG-TERM LIABILITIES	187,339	125,823
STOCKHOLDERS' EQUITY:	'	'
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.001 par value; 100,000,000 shares authorized, 74,221,879 and 74,021,879 shares issued and outstanding, respectively	74,222	74,022
Additional paid-in capital	58,247,422	58,207,622
Accumulated deficit	-31,678,445	-31,678,445
Accumulated deficit during the exploration stage	-10,815,534	-10,306,843
TOTAL STOCKHOLDERS' EQUITY	15,827,665	16,296,356
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$16,361,724	$16,892,812

Statement_of_Financial_Positio

Statement of Financial Position - Parenthetical (USD $)	Dec. 31, 2013	Sep. 30, 2013
Statement of financial position	'	'
Preferred Stock, Par Value	$0.01	$0.01
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$0.00	$0.00
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares Issued	74,221,879	74,021,879
Common Stock, Shares Outstanding	74,221,879	74,021,879

TIMBERLINE_RESOURCES_CORPORATI1

TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES (An Exploration Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (USD $)	3 Months Ended		26 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
OPERATING EXPENSES:	'	'	'
Mineral exploration expenses	$163,950	$806,191	$6,651,082
Gain on lease of mineral rights	'	'	-325,000
Salaries and benefits	201,512	201,099	1,975,282
Professional fees expense	57,919	74,454	485,388
Insurance expense	22,313	25,313	229,305
Gain on disposal of equipment	-16,565	'	-16,565
Other general and administrative expenses	79,214	127,433	1,478,452
TOTAL OPERATING EXPENSES	508,343	1,234,490	10,477,944
LOSS FROM OPERATIONS	-508,343	-1,234,490	-10,477,944
OTHER INCOME (EXPENSE):	'	'	'
Foreign exchange loss	-426	-671	-2,790
Interest income	78	34,172	194,808
Related party interest expense	'	'	-29,608
Impairment of other assets	'	'	-450
Impairment of available-for-sale securities	'	'	-50,000
TOTAL OTHER INCOME (EXPENSE), NET	-348	33,501	-337,590
LOSS BEFORE INCOME TAXES	-508,691	-1,200,989	-10,815,534
INCOME TAX EXPENSE	0	0	0
NET LOSS	-508,691	-1,200,989	-10,815,534
OTHER COMPREHENSIVE INCOME (LOSS):	'	'	'
Reclassification of net loss on available-for-sale equity securities included in net loss	'	'	-486,400
COMPREHENSIVE LOSS	($508,691)	($1,200,989)	($11,301,934)
NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS, BASIC AND DILUTED	($0.01)	($0.02)	'
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED	74,167,531	62,584,379	'

TIMBERLINE_RESOURCES_CORPORATI2

TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES (An Exploration Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	3 Months Ended		26 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'	'
Net loss	($508,691)	($1,200,989)	($10,815,534)
Adjustments to reconcile net loss to net cash used by operating activities:	'	'	'
Depreciation and amortization	5,178	7,657	83,986
Stock based compensation	'	'	338,000
Gain on disposal of equipment	-16,565	'	-16,565
Accretion of asset retirement obligation	1,516	1,444	13,214
Gain on lease of mineral rights	'	'	-325,000
Stock issued for mineral exploration expenses	'	'	21,500
Impairment of other assets	'	'	450
Amortization of deferred financing cost with related party	'	'	15,909
Impairment of available-for-sale equity securities	'	'	50,000
Changes in assets and liabilities:	'	'	'
Prepaid drilling services, prepaid expenses and other current assets, deposits and other assets	-2,454	-7,109	727,025
Joint venture receivable	19,753	761,891	6,577
Accounts payable	-28,993	-309,416	-225,042
Accrued expenses	-33,705	54,875	179,587
Accrued payroll, benefits and taxes	-1,215	97	51,229
Receivable from sale of discontinued operations	'	'	1,657,625
Net cash used by operating activities	-565,176	-691,550	-7,787,489
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'	'
Purchase of property, mineral rights and equipment	-54,000	-54,500	-786,500
Proceeds from sale of mineral rights, property and equipment	22,056	'	22,056
Payment received on note receivable	'	'	1,350,000
Change in restricted cash	'	'	-201,086
Change in other assets	'	'	-50,000
Net cash provided (used) by investing activities	-31,944	-54,500	334,470
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'	'
Proceeds from issuance of stock and warrants, net of stock offering costs	'	888,415	1,683,837
Payments on convertible note payable to related party	'	'	-5,000,000
Proceeds from exercise of stock options	'	'	11,550
Net cash provided (used) by financing activities	'	888,415	-3,304,613
Net increase (decrease) in cash and cash equivalents	-597,120	142,365	-10,757,632
CASH AT BEGINNING OF PERIOD	824,919	1,034,080	10,985,431
CASH AT END OF PERIOD	227,799	1,176,445	227,799
NON-CASH FINANCING AND INVESTING ACTIVITIES:	'	'	'
Common stock issued for mineral rights	40,000	'	846,000
Common stock payable for accounts payable	60,000	'	60,000
Long term investment received from lease of mineral rights	'	'	$75,000

Note_1_Organization_and_Descri

Note 1 - Organization and Description of Business	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 1 - Organization and Description of Business:	'
	NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS:
	Timberline Resources Corporation (“Timberline” or “the Company”, “we”, “us”, “our”) was incorporated in August of 1968 under the laws of the State of Idaho as Silver Crystal Mines, Inc., for the purpose of exploring for precious metal deposits and advancing them to production.  In 2008, we reincorporated into the State of Delaware pursuant to a merger agreement approved by our shareholders.
	In 2006, we acquired Kettle Drilling, Inc. and its Mexican subsidiary, World Wide Exploration S.A. de C.V. (“World Wide”). In 2008, Kettle Drilling, Inc. changed its name to Timberline Drilling Incorporated (“Timberline Drilling”).  In November 2011, we sold Timberline Drilling and World Wide and became an exploration stage enterprise.

Note_2_Summary_of_Significant_

Note 2 - Summary of Significant Accounting Policies	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 2 - Summary of Significant Accounting Policies:	'
	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
	a.  Basis of Presentation and Going Concern – The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three month period ended December 31, 2013 are not necessarily indicative of the results that may be expected for the full year ending September 30, 2014.  All amounts presented are in U.S. dollars.  For further information refer to the financial statements and footnotes thereto in our Annual Report on Form 10-K for the year ended September 30, 2013.
	The consolidated financial statements for the three months ended December 31, 2013 were prepared on the basis that the Company is a going concern, which contemplates the realization of its assets and the settlement of its liabilities in the normal course of operations. These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate.  The Company’s ability to continue as a going concern is dependent upon its ability to receive cash flow from its Butte Highlands Gold Project or to successfully obtain additional financing. While the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company.
	b.  Exploration Stage Enterprise – Following the sale of Timberline Drilling, we are in the exploration stage of operation.  Therefore, as of November 9, 2011, our financial statements have been prepared in accordance with the provisions of ASC 915 Development Stage Enterprises, as we devote substantially all of our efforts to acquiring and exploring mining interests that management believes could eventually provide sufficient net profits to sustain our existence.  Until such interests are engaged in commercial production, we will continue to prepare our consolidated financial statements and related disclosures in accordance with this standard.
	c.  Reclassifications – Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform to current period presentation with no effect on previously reported net income (loss) and accumulated deficit.
	d.  Net Income (Loss) per Share – Basic earnings per share (“EPS”) is computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities.
	The dilutive effect of convertible and outstanding securities, in periods of future income as of December 31, 2013 and 2012, would be as follows:
		2013	2012
	Stock options	3,991,500	6,304,357
	Warrants	300,000	150,000
	Total possible dilution	4,291,500	6,454,357
	At December 31, 2013 and 2012, the effect of the Company’s outstanding options and common stock equivalents would have been anti-dilutive.
	e.  Asset retirement obligation – We account for asset retirement obligations by following the uniform methodology for accounting for estimated reclamation and abandonment costs as prescribed by authoritative accounting guidance.  This guidance provides that the fair value of a liability for an asset retirement obligation (“ARO”) will be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The ARO is capitalized as part of the carrying value of the assets to which it is associated, and depreciated over the useful life of the asset. Adjustments are made to the liability for changes resulting from passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation. We have an ARO associated with our exploration program at the Lookout Mountain exploration project.
	f.  New accounting pronouncements – In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This standard requires companies to present information about reclassification adjustments from accumulated other comprehensive income to the income statement, including the income statement line items affected by the reclassification. The information must be presented in the financial statements in a single note or on the face of the financial statements. The new accounting guidance also requires the disclosure to be cross referenced to other financial statement disclosures for reclassification items that are not reclassified directly to net income in their entirety in the same reporting period. The new requirements are effective for public entities in fiscal years (including interim periods) beginning after December 15, 2012. Adoption of this guidance did not have a material effect on our consolidated financial statements.
	In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This standard provides guidance on the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  The new requirements are effective for public entities in fiscal years (including interim periods) beginning after December 15, 2013. Adoption of this guidance is not expected to have a material effect on our consolidated financial statements.

Note_3_Fair_Value_Measurements

Note 3 - Fair Value Measurements	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 3 - Fair Value Measurements:	'
	NOTE 3 – FAIR VALUE MEASUREMENTS:
	The table below sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.
			December 31,   2013	30-Sep-13		Input Hierarchy Level
	Assets:
	Cash	$	227,799	$	824,919		Level 1
	Restricted cash		639,422		639,422		Level 1

Note_4_Investment_in_Joint_Ven

Note 4 - Investment in Joint Venture	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 4 - Investment in Joint Venture:	'
	NOTE 4 – INVESTMENT IN JOINT VENTURE:
	In July 2009, we entered into a joint venture operating agreement (the “Agreement”) with Highland Mining, LLC (“Highland”).  The joint venture entity, Butte Highlands JV, LLC (“BHJV”) was created for the purpose of developing and mining the Butte Highlands Gold Project.  As a result of our contribution of our 100% interest in the Butte Highlands Gold Project, carried on our balance sheet at cost ($642,450), we hold a 50% interest in BHJV.  Under terms of the Agreement, our interest in BHJV will be carried to production by Highland, which will fund all future project exploration and mine development costs.
	Under the Agreement, Highland contributed property and agreed to fund all future mine development costs at Butte Highlands.  Both the Company’s and Highland’s share of development costs will be paid from proceeds of future mine production.  The Operating Agreement stipulates that Highland shall appoint a manager of BHJV and that Highland will manage BHJV until such time as all mine development costs, less $2 million (the deemed value of our contribution of property to BHJV), are distributed to Highland out of the proceeds from future mine production.
	At December 31, 2013 and September 30, 2013, we have a receivable from BHJV for expenses incurred on behalf of BHJV in the amount of $33,833 and $53,586, respectively.

Note_5_Prepaid_Drilling_Servic

Note 5 - Prepaid Drilling Services	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 5 - Prepaid Drilling Services:	'
	NOTE 5 – PREPAID DRILLING SERVICES:
	During the year ended September 30, 2012, we obtained $1,100,000 in prepaid drilling services as a portion of the consideration received from the sale of Timberline Drilling.  The prepayment amount represents discounts on future drilling services, or cash if we do not use the prepaid drilling services, to be provided by Timberline Drilling to us between November 2011 and November 2016.
	The following table summarizes activity in the Company’s prepaid drilling services:
		Three months ended December 31, 2013		Year ended
				30-Sep-13
	Beginning balance	$	660,000	$	887,116
	Cash received in lieu of drilling services		-		-227,116
	Less current portion		-220,000		-
	Ending balance	$	440,000	$	660,000

Note_6_Related_Party_Transacti

Note 6 - Related Party Transactions	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 6 - Related Party Transactions:	'
	NOTE 6 – RELATED PARTY TRANSACTIONS:
	Butte Highlands Joint Venture Agreement
	In 2009, we entered into an Operating Agreement with Highland, an entity controlled by Ron Guill, a former director of the Company, to form a 50/50 joint venture for development and mining of the Company’s Butte Highlands Gold Project (see Note 4). During the year ended September 30, 2012, Highland was sold to Montana State Gold Corporation (“MSGC”), a private corporation not affiliated with the Company or Ron Guill.  As a result, Highland is no longer a related party to the Company and Ron Guill is no longer the manager of BHJV.
	Daycon Minerals
	We owned approximately 18% and 15% of the issued and outstanding stock of Daycon Minerals (“Daycon”) as of December 31, 2013 and September 30, 2013, respectively.  In addition, our President and CEO, Paul Dircksen, is a member of the board of directors of Daycon as of December 31, 2013.

Note_7_Common_Stock_Warrants_a

Note 7 - Common Stock, Warrants and Preferred Stock	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 7 - Common Stock, Warrants and Preferred Stock:	'
	NOTE 7 – COMMON STOCK, WARRANTS AND PREFERRED STOCK:
	Common Stock
	During the quarter ended December 31, 2013, pursuant to an amended mineral property lease and option agreement, we issued 200,000 restricted common shares with a value of $40,000 based upon the closing price of our shares of common stock as quoted on the NYSE MKT.
	In December 2013, we announced that we had entered into a confidentiality agreement with RockStar Resources, Inc. (“RockStar”), including a No-Shop/Exclusivity clause valid through February 28, 2014.  Pursuant to the agreement, RockStar agreed to purchase $750,000 in shares of our common stock at a price of $0.20 per share in three, equal, installments of $250,000 on or before December 31, 2013, January 31, 2014 and February 28, 2014.  As of December 31, 2013, RockStar has not purchased any shares of our common stock.
	In December 2013, we entered into a Vendor Agreement to exchange $60,000 of our accounts payable for common stock.  As of December 31, 2013, the common stock had not been issued and is classified as common stock payable.
	Warrants
	The following is a summary of the Company’s warrants outstanding:
				Exercise Price
		Warrants
	Outstanding at September 30, 2013	300,000	$	0.25
	Issued	-		-
	Exercised	-		-
	Expired	-		-
	Outstanding at December 31, 2013	300,000	$	0.25
	Preferred Stock
	We are authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value. Our Board of Directors is authorized to issue the preferred stock from time to time in series, and is further authorized to establish such series, to fix and determine the variations in the relative rights and preferences as between series, to fix voting rights, if any, for each series, and to allow for the conversion of preferred stock into common stock.

Note_8_Stock_Options

Note 8 - Stock Options	3 Months Ended
	Dec. 31, 2013
Notes	'
Note 8 - Stock Options:	'
	NOTE 8 – STOCK OPTIONS:
	We have established the Amended 2005 Equity Incentive Plan (as amended by our shareholders on May 28, 2010) to authorize the granting of up to 10,000,000 stock options to employees, directors and consultants. Upon exercise of options, shares are issued from the available authorized shares of the Company.  Option awards are granted with an exercise price equal to the fair market value of our stock at the date of grant.
	No option awards were granted during the three months ended December 31, 2013 and 2012 and no option awards vested under the plan.  Therefore, no stock option expense is included in the consolidated statements of operations for the three months ending December 31, 2013 and 2012.
	The following is a summary of our options issued under the Amended 2005 Equity Incentive Plan:
			Options		Weighted  Average
					Exercise Price
	Outstanding at September 30, 2013			5,271,500	$	0.63
		Granted		-		-
		Exercised		-		-
		Expired		-1,280,000		0.33
	Outstanding at December 31, 2013			3,991,500	$	0.72
	Exercisable at December 31, 2013			3,991,500	$	0.72
	Unrecognized compensation expense related to options at December 31, 2013				$	-
	Average remaining contractual term of options outstanding and exercisable					2.1
	at December 31, 2013 (years)
	The aggregate of options both outstanding and exercisable as of December 31, 2013 had no intrinsic value based on the closing price of $0.18 per share of our common stock on December 31, 2013.

Note_2_Summary_of_Significant_1

Note 2 - Summary of Significant Accounting Policies: Basis of Presentation (Policies)	3 Months Ended
	Dec. 31, 2013
Policies	'
Basis of Presentation	'Basis of Presentation and Going Concern – The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three month period ended December 31, 2013 are not necessarily indicative of the results that may be expected for the full year ending September 30, 2014.  All amounts presented are in U.S. dollars.  For further information refer to the financial statements and footnotes thereto in our Annual Report on Form 10-K for the year ended September 30, 2013.

Note_2_Summary_of_Significant_2

Note 2 - Summary of Significant Accounting Policies: Exploration Stage Enterprise (Policies)	3 Months Ended
	Dec. 31, 2013
Policies	'
Exploration Stage Enterprise	'Exploration Stage Enterprise – Following the sale of Timberline Drilling, we are in the exploration stage of operation.  Therefore, as of November 9, 2011, our financial statements have been prepared in accordance with the provisions of ASC 915 Development Stage Enterprises, as we devote substantially all of our efforts to acquiring and exploring mining interests that management believes could eventually provide sufficient net profits to sustain our existence.  Until such interests are engaged in commercial production, we will continue to prepare our consolidated financial statements and related disclosures in accordance with this standard.

Note_2_Summary_of_Significant_3

Note 2 - Summary of Significant Accounting Policies: Reclassifications (Policies)	3 Months Ended
	Dec. 31, 2013
Policies	'
Reclassifications	'Reclassifications – Certain amounts in the prior period financial statements have been reclassified for comparative purposes to conform to current period presentation with no effect on previously reported net income (loss) and accumulated deficit.

Note_2_Summary_of_Significant_4

Note 2 - Summary of Significant Accounting Policies: Earnings Per Share, Policy (Policies)	3 Months Ended
	Dec. 31, 2013
Policies	'
Earnings Per Share, Policy	'Net Income (Loss) per Share – Basic earnings per share (“EPS”) is computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities.
	The dilutive effect of convertible and outstanding securities, in periods of future income as of December 31, 2013 and 2012, would be as follows:
		2013	2012
	Stock options	3,991,500	6,304,357
	Warrants	300,000	150,000
	Total possible dilution	4,291,500	6,454,357
	At December 31, 2013 and 2012, the effect of the Company’s outstanding options and common stock equivalents would have been anti-dilutive.

Note_2_Summary_of_Significant_5

Note 2 - Summary of Significant Accounting Policies: Asset Retirement Obligations, Policy (Policies)	3 Months Ended
	Dec. 31, 2013
Policies	'
Asset Retirement Obligations, Policy	'Asset retirement obligation – We account for asset retirement obligations by following the uniform methodology for accounting for estimated reclamation and abandonment costs as prescribed by authoritative accounting guidance.  This guidance provides that the fair value of a liability for an asset retirement obligation (“ARO”) will be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The ARO is capitalized as part of the carrying value of the assets to which it is associated, and depreciated over the useful life of the asset. Adjustments are made to the liability for changes resulting from passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation. We have an ARO associated with our exploration program at the Lookout Mountain exploration project.

Note_2_Summary_of_Significant_6

Note 2 - Summary of Significant Accounting Policies: New accounting pronouncements (Policies)	3 Months Ended
	Dec. 31, 2013
Policies	'
New accounting pronouncements	'New accounting pronouncements – In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This standard requires companies to present information about reclassification adjustments from accumulated other comprehensive income to the income statement, including the income statement line items affected by the reclassification. The information must be presented in the financial statements in a single note or on the face of the financial statements. The new accounting guidance also requires the disclosure to be cross referenced to other financial statement disclosures for reclassification items that are not reclassified directly to net income in their entirety in the same reporting period. The new requirements are effective for public entities in fiscal years (including interim periods) beginning after December 15, 2012. Adoption of this guidance did not have a material effect on our consolidated financial statements.
	In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This standard provides guidance on the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  The new requirements are effective for public entities in fiscal years (including interim periods) beginning after December 15, 2013. Adoption of this guidance is not expected to have a material effect on our consolidated financial statements.

Note_2_Summary_of_Significant_7

Note 2 - Summary of Significant Accounting Policies: Earnings Per Share, Policy: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	'
		2013	2012
	Stock options	3,991,500	6,304,357
	Warrants	300,000	150,000
	Total possible dilution	4,291,500	6,454,357

Note_3_Fair_Value_Measurements1

Note 3 - Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables)	3 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	'
			December 31,   2013	30-Sep-13		Input Hierarchy Level
	Assets:
	Cash	$	227,799	$	824,919		Level 1
	Restricted cash		639,422		639,422		Level 1

Note_5_Prepaid_Drilling_Servic1

Note 5 - Prepaid Drilling Services: Schedule of Prepaid Drilling Services (Tables)	3 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Prepaid Drilling Services	'
		Three months ended December 31, 2013		Year ended
				30-Sep-13
	Beginning balance	$	660,000	$	887,116
	Cash received in lieu of drilling services		-		-227,116
	Less current portion		-220,000		-
	Ending balance	$	440,000	$	660,000

Note_7_Common_Stock_Warrants_a1

Note 7 - Common Stock, Warrants and Preferred Stock: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables)	3 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Stockholders' Equity Note, Warrants or Rights	'
				Exercise Price
		Warrants
	Outstanding at September 30, 2013	300,000	$	0.25
	Issued	-		-
	Exercised	-		-
	Expired	-		-
	Outstanding at December 31, 2013	300,000	$	0.25

Note_8_Stock_Options_Schedule_

Note 8 - Stock Options: Schedule of Share-based Compensation, Activity (Tables)	3 Months Ended
	Dec. 31, 2013
Tables/Schedules	'
Schedule of Share-based Compensation, Activity	'
			Options		Weighted  Average
					Exercise Price
	Outstanding at September 30, 2013			5,271,500	$	0.63
		Granted		-		-
		Exercised		-		-
		Expired		-1,280,000		0.33
	Outstanding at December 31, 2013			3,991,500	$	0.72
	Exercisable at December 31, 2013			3,991,500	$	0.72
	Unrecognized compensation expense related to options at December 31, 2013				$	-
	Average remaining contractual term of options outstanding and exercisable					2.1
	at December 31, 2013 (years)

Note_2_Summary_of_Significant_8

Note 2 - Summary of Significant Accounting Policies (Details)	3 Months Ended
	Dec. 31, 2013
Details	'
Going Concern Note	'The consolidated financial statements for the three months ended December 31, 2013 were prepared on the basis that the Company is a going concern, which contemplates the realization of its assets and the settlement of its liabilities in the normal course of operations. These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. The Company’s ability to continue as a going concern is dependent upon its ability to receive cash flow from its Butte Highlands Gold Project or to successfully obtain additional financing. While the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company.

Note_2_Summary_of_Significant_9

Note 2 - Summary of Significant Accounting Policies: Earnings Per Share, Policy: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Details	'	'
Stock options	3,991,500	6,304,357
Warrants	300,000	150,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,291,500	6,454,357

Note_3_Fair_Value_Measurements2

Note 3 - Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Details	'	'
Cash and Cash Equivalents, Fair Value Disclosure	$227,799	$824,919
Restricted Cash and Cash Equivalents, Current	$639,422	$639,422

Note_4_Investment_in_Joint_Ven1

Note 4 - Investment in Joint Venture (Details) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Details	'	'
Due from Affiliate, Current	$33,833	$53,586

Note_5_Prepaid_Drilling_Servic2

Note 5 - Prepaid Drilling Services (Details) (USD $)	12 Months Ended
	Sep. 30, 2012
Details	'
Prepaid drilling services acquired	$1,100,000

Note_5_Prepaid_Drilling_Servic3

Note 5 - Prepaid Drilling Services: Schedule of Prepaid Drilling Services (Details) (USD $)	3 Months Ended	12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013
Details	'	'
Beginning balance, Prepaid drilling services	660,000	887,116
Cash received in lieu of drilling services	'	($227,116)
Current portion of prepaid drilling services	-220,000	'
Prepaid Expense and Other Assets, Noncurrent	$440,000	$660,000

Note_7_Common_Stock_Warrants_a2

Note 7 - Common Stock, Warrants and Preferred Stock (Details) (USD $)	3 Months Ended
	Dec. 31, 2013
Details	'
Stock Issued During Period, Shares, Purchase of Assets	200,000
Stock Issued During Period, Value, Purchase of Assets	$40,000
Disclosure of common stock payable	'In December 2013, we entered into a Vendor Agreement to exchange $60,000 of our accounts payable for common stock. As of December 31, 2013, the common stock had not been issued and is classified as common stock payable.

Note_7_Common_Stock_Warrants_a3

Note 7 - Common Stock, Warrants and Preferred Stock: Schedule of Stockholders' Equity Note, Warrants or Rights (Details) (USD $)	Dec. 31, 2013	Sep. 30, 2013
Details	'	'
Outstanding	300,000	300,000
Weighted Average Exercise Price, Warrants Outstanding	$0.25	$0.25

Note_8_Stock_Options_Schedule_1

Note 8 - Stock Options: Schedule of Share-based Compensation, Activity (Details) (USD $)	3 Months Ended
	Dec. 31, 2013	Sep. 30, 2013
Details	'	'
Outstanding	3,991,500	5,271,500
Weighted Average Exercise Price, Outstanding	$0.72	$0.63
Expired	-1,280,000	'
Weighted Average Exercise Price, Expired	$0.33	'
Exercisable	3,991,500	'
Weighted Average Exercise Price, Exercisable	$0.72	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	2.1	'

Note_8_Stock_Options_Details

Note 8 - Stock Options (Details) (USD $)	3 Months Ended
	Dec. 31, 2013
Details	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$0