Timberline Resources (TLRS) 10-Q 14 May 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Mar. 31, 2014	12-May-14
Document and Entity Information	'	'
Entity Registrant Name	'TIMBERLINE RESOURCES CORPORATION	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
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	'Q2	'

TIMBERLINE_RESOURCES_CORPORATI

TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES (An Exploration Stage Company) CONSOLIDATED BALANCE SHEETS (interim period unaudited (USD $)	Mar. 31, 2014		Sep. 30, 2013
CURRENT ASSETS:	'		'
Cash	$241,544		$824,919
Prepaid expenses and other current assets	114,565		30,151
Joint venture receivable	34,275		53,586
TOTAL CURRENT ASSETS	390,384		908,656
PROPERTY, MINERAL RIGHTS AND EQUIPMENT	14,137,135		14,037,784
OTHER ASSETS:	'		'
Prepaid drilling services	440,000		660,000
Investment in joint venture	642,450		642,450
Restricted cash	624,422		639,422
Deposits and other assets	4,500		4,500
TOTAL OTHER ASSETS	1,711,372		1,946,372
TOTAL ASSETS	16,238,891		16,892,812
CURRENT LIABILITIES:	'		'
Accounts payable	127,723		204,897
Accrued expenses	184,167		213,292
Accrued payroll, benefits and taxes	36,998		52,444
Note and interest payable	501,027		'
TOTAL CURRENT LIABILITIES	849,915		470,633
LONG-TERM LIABILITIES:	'		'
Asset retirement obligation	128,932		125,823
TOTAL LONG-TERM LIABILITIES	128,932		125,823
COMMITMENTS	0	[1]	0	[1]
STOCKHOLDERS' EQUITY:	'		'
Common stock, $0.001 par value; 100,000,000 shares authorized, 74,868,938 and 74,021,879 shares issued and outstanding, respectively	74,869		74,022
Additional paid-in capital	58,356,775		58,207,622
Accumulated deficit	-31,678,445		-31,678,445
Accumulated deficit during the exploration stage	-11,493,155		-10,306,843
TOTAL STOCKHOLDERS' EQUITY	15,260,044		16,296,356
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$16,238,891		$16,892,812
[1]	Note 10

Statement_of_Financial_Positio

Statement of Financial Position - Parenthetical (USD $)	Mar. 31, 2014	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	74,868,938	74,021,879
Common Stock, Shares Outstanding	74,868,938	74,021,879

TIMBERLINE_RESOURCES_CORPORATI1

TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES (An Exploration Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) (UNAUDITED) (USD $)	3 Months Ended		6 Months Ended		29 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
OPERATING EXPENSES:	'	'	'	'	'
Mineral exploration expenses	$88,674	$340,515	$252,624	$1,146,706	$6,739,756
Gain on lease of mineral rights	'	-125,000	'	-125,000	-325,000
Salaries and benefits	319,982	201,093	521,494	402,192	2,295,264
Professional fees expense	78,544	34,305	136,463	108,759	563,932
Insurance expense	19,048	28,069	41,361	53,382	248,353
Gain on disposal of equipment	'	'	-16,565	'	-16,565
Other general and administrative expenses	99,339	201,775	178,553	329,208	1,577,791
TOTAL OPERATING EXPENSES	605,587	680,757	1,113,930	1,915,247	11,083,531
LOSS FROM OPERATIONS	-605,587	-680,757	-1,113,930	-1,915,247	-11,083,531
OTHER INCOME (EXPENSE):	'	'	'	'	'
Foreign exchange loss	-1,017	-614	-1,443	-1,285	-3,807
Interest income (expense), net	-1,017	28,557	-939	62,729	193,791
Related party interest expense	'	'	'	'	-29,608
Loss on settlement of prepaid drilling services	-70,000	'	-70,000	'	-70,000
Impairment of available-for-sale securities	'	'	'	'	-50,000
Impairment of other assets	'	'	'	'	-450,000
TOTAL OTHER INCOME (EXPENSE), NET	-72,034	27,943	-72,382	61,444	-409,624
LOSS BEFORE INCOME TAXES	-677,621	-652,814	-1,186,312	-1,853,803	-11,493,155
NET LOSS	-677,621	-652,814	-1,186,312	-1,853,803	-11,493,155
OTHER COMPREHENSIVE (LOSS):	'	'	'	'	'
Reclassification of net loss on available-for-sale equity securities included in net loss	'	'	'	'	-486,400
COMPREHENSIVE LOSS	($677,621)	($652,814)	($1,186,312)	($1,853,803)	($11,979,555)
NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS, BASIC AND DILUTED	($0.01)	($0.01)	($0.02)	($0.03)	'
WEIGHTED AVERAGE SHARES OUTSTANDING,BASIC AND DILUTED	74,818,611	68,104,101	74,489,494	65,313,912	'

TIMBERLINE_RESOURCES_CORPORATI2

TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES (An Exploration Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	6 Months Ended		29 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'	'
Net loss	($1,186,312)	($1,853,803)	($11,493,155)
Adjustments to reconcile net loss to net cash used by operating activities:	'	'	'
Depreciation and amortization	7,158	15,266	85,966
Loss on settlement of prepaid drilling services	70,000	'	70,000
Stock based compensation	'	10,000	338,000
Gain on disposal of equipment	-16,565	'	-16,565
Accretion of asset retirement obligation	3,108	2,960	14,806
Gain on lease of mineral rights	'	-125,000	-325,000
Stock issued for mineral exploration expenses	110,000	21,500	131,500
Impairment of other assets	'	'	450,000
Amortization of deferred financing cost with related party	'	'	15,909
Impairment of available-for-sale equity securities	'	'	50,000
Changes in operating assets and liabilities:	'	'	'
Prepaid drilling services, prepaid expenses and other current assets, deposits and other assets	-84,414	-18,277	645,065
Joint venture receivable	19,311	753,188	6,135
Accounts payable	-77,173	-626,071	-273,222
Accrued interest and expenses	-28,098	14,375	185,194
Accrued payroll, benefits and taxes	-15,446	-1,135	36,998
Receivable from sale of discontinued operations	'	'	1,657,625
Net cash used by operating activities	-1,198,431	-1,806,997	-8,420,744
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'	'
Purchase of property, mineral rights and equipment	-72,000	-72,500	-804,500
Proceeds from sale of property, mineral rights and equipment	22,056	'	22,056
Payment received on note receivable	'	600,000	1,350,000
Change in restricted cash	15,000	'	-186,086
Settlement of prepaid drilling services	150,000	'	150,000
Change in other assets	'	'	-50,000
Net cash provided by investing activities	115,056	527,500	481,470
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'	'
Proceeds from issuance of stock and warrants, net of stock offering costs	'	888,415	1,683,837
Proceeds from issuance of note payable	500,000	'	500,000
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	500,000	888,415	-2,804,613
Net decrease in cash and cash equivalents	-583,375	-391,082	-10,743,887
CASH AT BEGINNING OF PERIOD	824,919	1,034,080	10,985,431
CASH AT END OF PERIOD	241,544	642,998	241,544
NON-CASH FINANCING AND INVESTING ACTIVITIES:	'	'	'
Common stock issued for mineral rights	40,000	'	846,000
Long term investment received from lease of mineral rights	'	$25,000	$75,000

Note_1_Organization_and_Descri

Note 1 - Organization and Description of Business	6 Months Ended
	Mar. 31, 2014
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	6 Months Ended
	Mar. 31, 2014
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 and six month periods ended March 31, 2014 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 and six month periods ended March 31, 2014 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 March 31, 2014 and 2013, would be as follows:
		2014	2013
	Stock options	3,334,000	6,239,357
	Warrants	300,000	150,000
	Total possible dilution	3,634,000	6,389,357
	At March 31, 2014 and 2013, 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	6 Months Ended
	Mar. 31, 2014
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.
			March 31,   2014	30-Sep-13		Input Hierarchy Level
	Assets:
	Cash	$	241,544	$	824,919		Level 1
	Restricted cash		624,422		639,422		Level 1

Note_4_Investment_in_Joint_Ven

Note 4 - Investment in Joint Venture	6 Months Ended
	Mar. 31, 2014
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 March 31, 2014 and September 30, 2013, we have a receivable from BHJV for expenses incurred on behalf of BHJV in the amount of $34,275 and $53,586, respectively.

Note_5_Prepaid_Drilling_Servic

Note 5 - Prepaid Drilling Services	6 Months Ended
	Mar. 31, 2014
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.  During the quarter ended March 31, 2014, we accepted $150,000 as settlement of the portion of the prepaid drilling services that was due to be paid to the Company in November 2014 ($220,000).
	The following table summarizes activity in the Company’s prepaid drilling services:
		Six months ended March 31, 2014		Year ended
				30-Sep-13
	Beginning balance	$	660,000	$	887,116
	Cash received in lieu of drilling services		-150,000		-227,116
	Loss on settlement of prepaid drilling services		-70,000		-
	Ending balance	$	440,000	$	660,000

Note_6_Related_Party_Transacti

Note 6 - Related Party Transactions	6 Months Ended
	Mar. 31, 2014
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 own approximately 18% and 15% of the issued and outstanding stock of Daycon Minerals (“Daycon”) as of March 31, 2014 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 March 31, 2014.  At September 30, 2013 we evaluated the fair value of our investment in Daycon and determined that this asset was impaired.  We determined that the fair value measurement of our investment in Daycon fell under Level 3 (no significant observable inputs) of the fair value hierarchy.  Given the adverse market conditions for mineral exploration companies and our doubt about Daycon’s ability to continue as a going concern, we concluded that the fair value of our investment in Daycon was zero.  As a result, we recognized a $450,000 impairment of long term investments in our consolidated statement of operations for the year ended September 30, 2013.

Note_7_Note_Payable

Note 7 - Note Payable	6 Months Ended
	Mar. 31, 2014
Notes	'
Note 7 - Note Payable:	'
	NOTE 7 – NOTE PAYABLE:
	On March 14, 2014, the Company entered into a promissory note (the “Note”) and deed of trust, security agreement, assignment of leases and rents and fixture filing to secure promissory note (the “Deed of Trust”) with Wolfpack Gold Corp. (“Wolfpack”).  The Company and Wolfpack entered into the Note and the Deed of Trust in connection with a proposed business combination (the “Proposed Transaction”) that is the subject of a letter of intent between the parties dated effective March 11, 2014.
	Pursuant to the Note, the Company has agreed to repay Wolfpack the unpaid principal amount of advances made under the Note up to a maximum principal amount of $1,000,000, together with accrued interest thereon.   The amount drawn on the Note will bear interest at 5% during the first six months of the loan and thereafter at 10% until repaid.  Interest is payable in arrears on the date that the Note is prepaid, in proportion to the principal amount being prepaid, or on the date that the Note is due and payable. The Note is due and payable on the earlier of (i) five business days after the Proposed Transaction closes or (ii) March 15, 2015.  The Company may repay the outstanding principal balance on the Note, in whole or in part, without penalty or premium, at any time and from time to time before the Note is due and payable.  The Note is secured by the Company’s interest in the Seven Troughs property.  The Note, including principal and accrued interest, is expected to be forgiven upon completion of the Proposed Transaction.
	As of March 31, 2014, Wolfpack had advanced $500,000 to the Company and $1,027 of interest had accrued under the Note.  The Note provides for additional tranches of $250,000 to be advanced based on future funding requests by the Company.
	If the Proposed Transaction does not complete prior to March 15, 2015 and any indebtedness under the Note is not otherwise prepaid, then on the maturity date of the Note and subject to any required regulatory approvals and available prospectus exemptions, Wolfpack may, in exchange for indebtedness under the Note, elect to receive shares of the Company’s common stock obtained by dividing the amount of Note indebtedness (outstanding principal plus accrued interest) that Wolfpack wishes to convert by $0.14 (for outstanding principal amounts to be converted) or the market price (as defined in the rules of the TSX Venture Exchange) of the Company’s common stock on the NYSE MKT exchange where the Company’s common stock trades (for outstanding interest to be converted).
	The Company has determined that the conversion price represents a beneficial conversion feature.  However, since the conversion feature is effective only if the Proposed Transaction is not completed prior to March 15, 2015, the Company has measured the conversion feature at the date of the initial advance on the Note, but will not recognize it until the actual commitment date (if necessary), which the Company has determined to be March 15, 2015.
	The Company’s negative covenants under the Note include covenants that the Company will not, without the prior written consent of Wolfpack, do any of the following:
	(i)                   pay any dividend or other distribution to its shareholders, except such as may occur in connection with the Proposed Transaction;
	(ii)                 lend money, guarantee a loan or grant any other form of financial assistance or benefit to any person;
	(iii)                make any material payments to its shareholders, directors or officers other than to Wolfpack and other than in the ordinary course of business, amounts paid to settle loans advanced by such parties or amounts paid pursuant to employment or consulting arrangements with such parties;
	(iv)               create, incur, assume or permit to exist any indebtedness, except the indebtedness created under the Note and except as during normal course of business;
	(v)                 create, incur, assume or permit to exist any lien on the Seven Troughs property, except for (A) the security interest granted to Wolfpack pursuant to the Note and the Deed of Trust, and (B) liens permitted under the Note (including liens for taxes not yet due and payable, survey exceptions, easements or zoning restrictions affecting the Seven Troughs property, rights reserved to governmental entities and other liens that do not materially impair the current use of the Seven Troughs property);
	(vi)               enter into any arrangement, directly or indirectly, with any person for the sale or transfer of any interest in the Seven Troughs property, unless such arrangement provides for the payment of all outstanding indebtedness under the Note prior to or concurrently with the closing of such arrangement;
	(vii)              amend its constating documents or by-laws, as applicable, except as done by shareholders at a properly constituted meeting or such amendments by the board of directors that do not or could not reasonably be expected to result in a material adverse effect or affect the Company’s obligations under the Note, the Company’s ability to meet its obligations under the Note, the security interest granted pursuant to the Deed of Trust or otherwise result in an Event of Default;
	(viii)            merge, amalgamate or otherwise consolidate with any other person; except as such may occur in connection with the Proposed Transaction; and
	(ix)               enter into any agreement or arrangement with any person or create, incur, assume or permit to exist any royalty of any type on the Seven Troughs property.

Note_8_Common_Stock_Warrants_a

Note 8 - Common Stock, Warrants and Preferred Stock	6 Months Ended
	Mar. 31, 2014
Notes	'
Note 8 - Common Stock, Warrants and Preferred Stock:	'
	NOTE 8 – COMMON STOCK, WARRANTS AND PREFERRED STOCK:
	Common Stock
	During the six months ended March 31, 2014, pursuant to a vendor agreement related to the provision of metallurgical testing services, we issued 647,059 restricted common shares with a value of $110,000 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 March 31, 2014, RockStar has not purchased any shares of our common stock and we do not expect that they will.
	During the six month period ended March 31, 2014, 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.
	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 March 31, 2014	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_9_Stock_Options

Note 9 - Stock Options	6 Months Ended
	Mar. 31, 2014
Notes	'
Note 9 - Stock Options:	'
	NOTE 9 – 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 or six months ended March 31, 2014, and no option awards vested under the plan during those periods.  Therefore, no stock option expense is included in the consolidated statements of operations for the three months or six months ending March 31, 2014.  During the three months and six months ended March 31, 2013, 100,000 options that vested immediately were granted to a director, and no other options were granted or vested during the six months ending March 31, 2013.
	The fair value of option awards granted during the six months ended March 31, 2013 were estimated on the date of grant with a Black-Scholes option-pricing model using the assumptions noted in the following table.
		Six months ended		Six months ended
		31-Mar-14		31-Mar-13
	Expected volatility	0		71.30%
	Weighted-average volatility	0		71.30%
	Expected dividends	0		0
	Expected term (in years)	0		3
	Risk-free rate	0		0.38%
	Expected forfeiture rate	0		0%
	Total compensation cost of options vested under the plan, charged against operations, is included in the consolidated statements of operations as follows:
			Three months ended March 31,				Six months ended March 31,
			2014		2013		2014		2013
	Salaries and benefits	$	-	$	-	$	-	$	-
	Other general and administrative expenses		-		10,000		-		10,000
	Total	$	-	$	10,000	$	-	$	10,000
	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			-1,937,500			-0.47
	Outstanding at March 31, 2014				3,334,000		$	0.71
	Exercisable at March 31, 2014				3,334,000		$	0.71
	Unrecognized compensation expense related to options at March 31, 2014						$	0
	Average remaining contractual term of options outstanding and exercisable							1.88
	at March 31, 2014 (years)
	The aggregate of options both outstanding and exercisable as of March 31, 2014 had no intrinsic value based on the closing price of $0.15 per share of our common stock on March 31, 2014.

Note_10_Commitments

Note 10 - Commitments	6 Months Ended
	Mar. 31, 2014
Notes	'
Note 10 - Commitments:	'
	NOTE 10 – COMMITMENTS:
	Real Estate Lease Commitments
	The Company has real estate lease commitments related to its main office in Coeur d’Alene, Idaho and a facility in Eureka, Nevada.
	Total office lease expense from continuing operations is included in the consolidated statements of operations as follows:
			Three months ended March 31,				Six months ended March 31,
			2014		2013		2014		2013
	Mineral exploration expenses	$	3,900	$	11,400	$	7,800	$	22,800
	Other general and administrative expenses		12,000		12,000		24,000		24,000
	Total	$	15,900	$	23,400	$	31,800	$	46,800

Note_2_Summary_of_Significant_1

Note 2 - Summary of Significant Accounting Policies: Basis of Presentation (Policies)	6 Months Ended
	Mar. 31, 2014
Policies	'
Basis of Presentation	'
	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 and six month periods ended March 31, 2014 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 and six month periods ended March 31, 2014 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_2

Note 2 - Summary of Significant Accounting Policies: Exploration Stage Enterprise (Policies)	6 Months Ended
	Mar. 31, 2014
Policies	'
Exploration Stage Enterprise	'
	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.

Note_2_Summary_of_Significant_3

Note 2 - Summary of Significant Accounting Policies: Reclassifications (Policies)	6 Months Ended
	Mar. 31, 2014
Policies	'
Reclassifications	'
	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.

Note_2_Summary_of_Significant_4

Note 2 - Summary of Significant Accounting Policies: Earnings Per Share, Policy (Policies)	6 Months Ended
	Mar. 31, 2014
Policies	'
Earnings Per Share, Policy	'
	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 March 31, 2014 and 2013, would be as follows:
		2014	2013
	Stock options	3,334,000	6,239,357
	Warrants	300,000	150,000
	Total possible dilution	3,634,000	6,389,357
	At March 31, 2014 and 2013, 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)	6 Months Ended
	Mar. 31, 2014
Policies	'
Asset Retirement Obligations, Policy	'
	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.

Note_2_Summary_of_Significant_6

Note 2 - Summary of Significant Accounting Policies: New accounting pronouncements (Policies)	6 Months Ended
	Mar. 31, 2014
Policies	'
New accounting pronouncements	'
	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_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)	6 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	'
		2014	2013
	Stock options	3,334,000	6,239,357
	Warrants	300,000	150,000
	Total possible dilution	3,634,000	6,389,357

Note_3_Fair_Value_Measurements1

Note 3 - Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables)	6 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	'
			March 31,   2014	30-Sep-13		Input Hierarchy Level
	Assets:
	Cash	$	241,544	$	824,919		Level 1
	Restricted cash		624,422		639,422		Level 1

Note_5_Prepaid_Drilling_Servic1

Note 5 - Prepaid Drilling Services: Schedule of Prepaid Drilling Services (Tables)	6 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of Prepaid Drilling Services	'
		Six months ended March 31, 2014		Year ended
				30-Sep-13
	Beginning balance	$	660,000	$	887,116
	Cash received in lieu of drilling services		-150,000		-227,116
	Loss on settlement of prepaid drilling services		-70,000		-
	Ending balance	$	440,000	$	660,000

Note_8_Common_Stock_Warrants_a1

Note 8 - Common Stock, Warrants and Preferred Stock: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables)	6 Months Ended
	Mar. 31, 2014
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 March 31, 2014	300,000	$	0.25

Note_9_Stock_Options_Schedule_

Note 9 - Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables)	6 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	'
		Six months ended	Six months ended
		31-Mar-14	31-Mar-13
	Expected volatility	0	71.30%
	Weighted-average volatility	0	71.30%
	Expected dividends	0	0
	Expected term (in years)	0	3
	Risk-free rate	0	0.38%
	Expected forfeiture rate	0	0%

Note_9_Stock_Options_Schedule_1

Note 9 - Stock Options: Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Tables)	6 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs	'
			Three months ended March 31,				Six months ended March 31,
			2014		2013		2014		2013
	Salaries and benefits	$	-	$	-	$	-	$	-
	Other general and administrative expenses		-		10,000		-		10,000
	Total	$	-	$	10,000	$	-	$	10,000

Note_9_Stock_Options_Schedule_2

Note 9 - Stock Options: Schedule of Share-based Compensation, Activity (Tables)	6 Months Ended
	Mar. 31, 2014
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		-1,937,500		-0.47
	Outstanding at March 31, 2014			3,334,000	$	0.71
	Exercisable at March 31, 2014			3,334,000	$	0.71
	Unrecognized compensation expense related to options at March 31, 2014				$	0
	Average remaining contractual term of options outstanding and exercisable					1.88
	at March 31, 2014 (years)

Note_10_Commitments_Schedule_o

Note 10 - Commitments: Schedule of Rent Expense (Tables)	6 Months Ended
	Mar. 31, 2014
Tables/Schedules	'
Schedule of Rent Expense	'
			Three months ended March 31,				Six months ended March 31,
			2014		2013		2014		2013
	Mineral exploration expenses	$	3,900	$	11,400	$	7,800	$	22,800
	Other general and administrative expenses		12,000		12,000		24,000		24,000
	Total	$	15,900	$	23,400	$	31,800	$	46,800

Note_2_Summary_of_Significant_8

Note 2 - Summary of Significant Accounting Policies: Basis of Presentation (Details)	6 Months Ended
	Mar. 31, 2014
Details	'
Going Concern Note	'The consolidated financial statements for the three and six month periods ended March 31, 2014 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)	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details	'	'
Stock options	3,334,000	6,239,357
Warrants	300,000	150,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,634,000	6,389,357

Note_3_Fair_Value_Measurements2

Note 3 - Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Details	'	'
Cash and Cash Equivalents, Fair Value Disclosure	$241,544	$824,919
Restricted Cash and Cash Equivalents, Current	$624,422	$639,422

Note_4_Investment_in_Joint_Ven1

Note 4 - Investment in Joint Venture (Details) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Details	'	'
Due from Affiliate, Current	$34,275	$53,586

Note_5_Prepaid_Drilling_Servic2

Note 5 - Prepaid Drilling Services: Schedule of Prepaid Drilling Services (Details) (USD $)	3 Months Ended	6 Months Ended	12 Months Ended	29 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2014
Details	'	'	'	'
Beginning balance, Prepaid drilling services	'	660,000	887,116	'
Cash received in lieu of drilling services	'	($150,000)	($227,116)	'
Loss on settlement of prepaid drilling services	-70,000	-70,000	'	-70,000
Prepaid Expense and Other Assets, Noncurrent	$440,000	$440,000	$660,000	$440,000

Note_7_Note_Payable_Details

Note 7 - Note Payable (Details) (USD $)	6 Months Ended	29 Months Ended
	Mar. 31, 2014	Mar. 31, 2014
Details	'	'
Debt Instrument, Description	'Pursuant to the Note, the Company has agreed to repay Wolfpack the unpaid principal amount of advances made under the Note up to a maximum principal amount of $1,000,000, together with accrued interest thereon. The amount drawn on the Note will bear interest at 5% during the first six months of the loan and thereafter at 10% until repaid. Interest is payable in arrears on the date that the Note is prepaid, in proportion to the principal amount being prepaid, or on the date that the Note is due and payable. The Note is due and payable on the earlier of (i) five business days after the Proposed Transaction closes or (ii) March 15, 2015. The Company may repay the outstanding principal balance on the Note, in whole or in part, without penalty or premium, at any time and from time to time before the Note is due and payable. The Note is secured by the Company’s interest in the Seven Troughs property. The Note, including principal and accrued interest, is expected to be forgiven upon completion of the Proposed Transaction.	'
Proceeds from issuance of note payable	$500,000	$500,000
Interest Payable, Current	$1,027	$1,027

Note_8_Common_Stock_Warrants_a2

Note 8 - Common Stock, Warrants and Preferred Stock (Details) (USD $)	6 Months Ended
	Mar. 31, 2014
Details	'
Stock Issued During Period, Shares, Issued for Services	647,059
Stock Issued During Period, Value, Issued for Services	$110,000
Stock Issued During Period, Shares, Purchase of Assets	200,000
Stock Issued During Period, Value, Purchase of Assets	$40,000

Note_8_Common_Stock_Warrants_a3

Note 8 - Common Stock, Warrants and Preferred Stock: Schedule of Stockholders' Equity Note, Warrants or Rights (Details) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Details	'	'
Outstanding	300,000	300,000
Weighted Average Exercise Price, Warrants Outstanding	$0.25	$0.25

Note_9_Stock_Options_Schedule_3

Note 9 - Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details	'	'
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	0.00%	71.30%
Fair Value Assumptions, Weighted Average Volatility Rate	0.00%	71.30%
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate	0.00%	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	'0 years	'3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.00%	0.38%
Sharebased Compensation Arrangement By Sharebased Payment Award FairValue Assumptions Expected Forfeiture Rate	0.00%	0.00%

Note_9_Stock_Options_Schedule_4

Note 9 - Stock Options: Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) (USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2013
Details	'	'
Other General and Administrative Expense	$10,000	$10,000
Total	$10,000	$10,000

Note_9_Stock_Options_Schedule_5

Note 9 - Stock Options: Schedule of Share-based Compensation, Activity (Details) (USD $)	6 Months Ended
	Mar. 31, 2014	Sep. 30, 2013
Details	'	'
Outstanding	3,334,000	5,271,500
Weighted Average Exercise Price	$0.71	$0.63
Expired	-1,937,500	'
Weighted Average Exercise Price, Expired	($0.47)	'
Exercisable	3,334,000	'
Weighted Average Exercise Price, Exercisable	$0.71	'
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$0	'
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	1.88	'

Note_10_Commitments_Schedule_o1

Note 10 - Commitments: Schedule of Rent Expense (Details) (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Details	'	'	'	'
Results of Operations Exploration Expense Mining	$3,900	$11,400	$7,800	$22,800
Portion of general expense paid for office lease	12,000	12,000	24,000	24,000
Payments for Rent	$15,900	$23,400	$31,800	$46,800