Timberline Resources (TLRS) 10-Q 14 Feb 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2019	Feb. 14, 2020
Details
Registrant CIK	0001288750
Fiscal Year End	--09-30
Registrant Name	Timberline Resources Corp
SEC Form	10-Q
Period End date	Dec. 31, 2019
Trading Symbol	TLRS
Trading Exchange	NONE
Tax Identification Number (TIN)	82-0291227
Number of common stock shares outstanding		74,895,260
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	false
Small Business	true
Emerging Growth Company	false
Entity File Number	001-34055
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	101 EAST LAKESIDE AVENUE
Entity Address, City or Town	COEUR D’ALENE
Entity Address, State or Province	ID
Entity Address, Postal Zip Code	83814
City Area Code	208
Local Phone Number	664-4859
Title of 12(b) Security	Common Stock, $0.001 par value
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Document Quarterly Report	true
Document Transition Report	false

Timberline Resources Corp and S

Timberline Resources Corp and Subsidiaries Consolidated Balance Sheets (Interim period unaudited) - USD ($)	Dec. 31, 2019	Sep. 30, 2019
CURRENT ASSETS:
Cash	$ 196,714	$ 30,757
Prepaid expenses and other current assets	59,870	21,132
Account receivable	19,963	118,525
TOTAL CURRENT ASSETS	276,547	170,414
PROPERTY, MINERAL RIGHTS, AND EQUIPMENT, net (NOTE 3)	14,991,738	15,023,843
OTHER ASSETS:
Reclamation bonds	292,684	305,184
Deposits and other assets	5,700	5,700
TOTAL OTHER ASSETS	298,384	310,884
TOTAL ASSETS	15,566,669	15,505,141
CURRENT LIABILITIES:
Accounts payable	41,397	103,485
Accrued expenses	32,506	102,236
Accrued interest	25	10,956
Accrued interest - related party	112,267	83,107
Accrued payroll, benefits and taxes	17,308	24,038
Payment obligation	150,239	178,533
Senior unsecured note payable - related party, current portions, net of discount	193,383	0
TOTAL CURRENT LIABILITIES	547,125	502,355
LONG-TERM LIABILITIES:
Asset retirement obligation	170,651	168,619
Senior unsecured note payable - related party, net of discount (NOTE 6)	300,000	452,255
TOTAL LONG-TERM LIABILITIES	470,651	620,874
TOTAL LIABILITIES	1,017,776	1,123,229
COMMITMENTS AND CONTINGENCIES (NOTES 3, 5 and 9)	0	0
STOCKHOLDERS' EQUITY: (NOTE 8)
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $0.001 par value; 200,000,000 shares authorized, 74,895,260 and 67,395,260 shares issued and outstanding, respectively	74,895	67,395
Additional paid-in capital	75,492,358	74,568,258
Accumulated deficit	(61,018,360)	(60,253,741)
TOTAL STOCKHOLDERS' EQUITY	14,548,893	14,381,912
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 15,566,669	$ 15,505,141

Timberline Resources Corp and_2

Timberline Resources Corp and Subsidiaries Consolidated Balance Sheets (Interim period unaudited) - Parenthetical - $ / shares	Dec. 31, 2019	Sep. 30, 2019
Details
Preferred Stock, Par or Stated Value Per Share	$ 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 or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	74,895,260	67,395,260
Common Stock, Shares, Outstanding	74,895,260	67,395,260

Timberline Resources Corp and_3

Timberline Resources Corp and Subsidiaries Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
OPERATING EXPENSES:
Mineral exploration	$ 146,482	$ 271,525
Salaries and benefits	125,290	43,318
Professional fees	68,851	92,792
Insurance	18,742	22,636
Other general and administrative	152,172	81,259
TOTAL OPERATING EXPENSES	511,537	511,530
LOSS FROM OPERATIONS	(511,537)	(511,530)
OTHER INCOME (EXPENSE):
Foreign exchange gain and other	18	956
Loss on extinguishment of debt - related party	(195,611)	0
Interest expense	(17,363)	(24,849)
Interest expense - related party	(40,126)	(14,250)
TOTAL OTHER INCOME (EXPENSE)	(253,082)	(38,123)
LOSS BEFORE INCOME TAXES	(764,619)	(549,653)
INCOME TAX PROVISION (BENEFIT)	0	0
NET LOSS	$ (764,619)	$ (549,653)
NET LOSS PER SHARE, BASIC AND DILUTED	$ (0.01)	$ (0.01)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED	73,020,260	60,791,369

Timberline Resources Corp and_4

Timberline Resources Corp and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Equity Balance at Sep. 30, 2018	$ 67,395	$ 74,568,258	$ (60,253,741)	$ 14,381,912
Equity balance, shares at Sep. 30, 2018	67,395,260
Common stock and warrants issued for cash	$ 7,500	592,500	0	600,000
Common stock and warrants issued for cash	7,500,000
Stock-based compensation	$ 0	161,100	0	161,100
Warrants issued for extinguishment of debt, related party	0	170,500	0	170,500
Net loss	$ 0	0	(764,619)	(764,619)
Equity balance, shares at Dec. 31, 2018	74,895,260
Equity Balance at Dec. 31, 2018	$ 74,895	75,492,358	(61,018,360)	14,548,893
Equity Balance at Sep. 30, 2019	$ 53,528	73,197,430	(58,596,458)	14,654,500
Equity balance, shares at Sep. 30, 2019	53,527,819
Common stock and warrants issued for cash	$ 7,500	592,500	0	600,000
Common stock and warrants issued for cash	7,500,000
Stock-based compensation	$ 0	5,000	0	5,000
Warrants issued for joint venture to AGEI	0	176,000	0	176,000
Net loss	$ 0	0	(549,653)	(549,653)
Equity balance, shares at Dec. 31, 2019	61,027,819
Equity Balance at Dec. 31, 2019	$ 61,028	$ 73,970,930	$ (59,146,111)	$ 14,885,847

Timberline Resources Corp and_5

Timberline Resources Corp and Subsidiaries Consoldiated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (764,619)	$ (549,653)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock based compensation	161,100	5,000
Accretion of asset retirement obligation	2,032	1,935
Amortization of discount on senior unsecured notes payable - related party	16,017	20,071
Loss on extinguishment of debt - related party	195,611	0
Changes in assets and liabilities:
Prepaid expenses and other current assets	(38,738)	(48,251)
Account receivable	98,562	0
Accounts payable	(62,088)	(11,322)
Accrued expenses	(69,730)	34,887
Accrued interest	(10,931)	18,890
Accrued interest - related party	29,160	14,250
Accrued payroll, benefits, and taxes	(6,730)	(18,449)
Net cash used by operating activities	(450,354)	(532,642)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of mineral rights	0	(18,000)
Refund of reclamation bond	12,500	0
Proceeds from lease of mineral rights	32,105	25,594
Net cash provided by investing activities	44,605	7,594
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock and warrants, net	600,000	600,000
Cash paid on payment obligation	(28,294)	0
Net cash provided by financing activities	571,706	600,000
Net increase in cash and cash equivalents	165,957	74,952
CASH AT BEGINNING OF PERIOD	30,757	110,736
CASH AT END OF PERIOD	196,714	185,688
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Warrants issued for purchase of mineral properties	$ 0	$ 176,000

Note 1 - Organization and Descr

Note 1 - Organization and Description of Business	3 Months Ended
	Dec. 31, 2019
Notes
Note 1 - Organization and Description of Business:	NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS: Timberline Resources Corporation (“Timberline” or “the Company) 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, the Company reincorporated into the State of Delaware, pursuant to a merger agreement approved by its shareholders. Basis of Presentation -

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies	3 Months Ended
	Dec. 31, 2019
Notes
Note 2 - Summary of Significant Accounting Policies:	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements. a. Going Concern The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. b. New Accounting Pronouncements - Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. c. Principles of Consolidation d. Reclassifications e. Reclamation Bonds f. Estimates and Assumptions g. Stock-based Compensation The value of common stock awards is determined based upon the closing price of the Company’s stock on the grant date of the award. Compensation expense for grants that vest is recognized ratably over the vesting period. The fair value of stock unit or stock awards is determined by the closing price of the Company’s common stock on the date of the grant h. Net Income (Loss) per Share The dilutive effect of convertible and outstanding securities as of December 31, 2019 and 2018 is as follows: December 31, 2019 December 31, 2018 Stock options 5,650,000 3,280,000 Warrants 53,541,908 49,106,373 Total potential dilution 59,191,908 52,386,373 At December 31, 2019 and 2018, the effect of the Company’s common stock equivalents would have been anti-dilutive.

Note 3 - Property, Mineral Righ

Note 3 - Property, Mineral Rights, and Equipment	3 Months Ended
	Dec. 31, 2019
Notes
Note 3 - Property, Mineral Rights, and Equipment:	NOTE 3 – PROPERTY, MINERAL RIGHTS, AND EQUIPMENT: The following is a summary of property, mineral rights, and equipment and accumulated depreciation at December 31, 2019 and September 30, 2019, respectively: Expected Useful Lives (years) December 31, 2019 September 30, 2019 Mineral rights – Eureka - $ 13,671,546 $ 13,703,651 Mineral rights – Elder Creek - 1,218,715 1,218,715 Mineral rights – Other - 50,000 50,000 Total mineral rights 14,940,261 14,972,366 Equipment and vehicles 2-5 53,678 53,678 Office equipment and furniture 3-7 70,150 70,150 Land - 51,477 51,477 Total property and equipment 175,305 175,305 Less accumulated depreciation (123,828) (123,828) Property, mineral rights, and equipment, net $ 14,991,738 $ 15,023,843 Depreciation expense for the quarters ended December 31, 2019 and 2018, was nil and nil, respectively. For the quarters ended December 31, 2019 and 2018, the Company received lease payments of $32,105 and $25,594, respectively, from a third party on two of the Company’s leases at the Company’s Eureka property. Monthly payments in the amount of approximately $8,500 are expected to continue to be received. These receipts are recorded as a reduction to property, mineral rights, and equipment. Elder Creek property: The Company met the 2018 work commitment, and issued 5,000,000 Class G warrants during the quarter ended December 31, 2018 as required by the amended agreement, which were fair valued at $176,000 on the date the commitment was satisfied. Lookout Mountain LLC: On June 28, 2019, the Company entered into a Limited Liability Company Agreement to form a Limited Liability Company (the “Agreement”) with PM&Gold Mines, Inc. (“PM&G”) for the advanced exploration, and if determined feasible, the development of the Company’s Lookout Mountain Gold project. The LLC Agreement calls for PM&G to fund exploration and development activities in two stages for an earned equity in the project. Timberline contributed certain claims that constitute the Lookout Mountain project and adjacent historical Oswego Mine area (the “Project”) to the limited liability company in exchange for its ownership position. Timberline will manage the project at least through Stage I of investment. PM&G shall retain the right to manage all Stage II activities with or without Timberline’s participation. Concurrent with completion of the Agreement, PM&G also participated in a private placement and acquired 3,367,441 shares, or 4.99%, of Timberline’s common shares. The placement includes the right of PM&G to maintain its position in Timberline by pro-rata participation in future financings. The initial interests in the LLC are 51% PM&G and 49% Timberline. The Company accounts for its investment in the LLC on the cost basis. During the quarter ended December 31, 2019, the Company paid $19,963 for Stage I exploration costs incurred by the Company on behalf of Lookout Mountain LLC, predominantly consulting and related expenses paid to consultants employed by the Company. The reimbursable costs were included as an Account receivable on the Company’s balance sheet.

Note 4 - Related-party Transact

Note 4 - Related-party Transactions	3 Months Ended
	Dec. 31, 2019
Notes
Note 4 - Related-party Transactions:	NOTE 4 – RELATED-PARTY TRANSACTIONS: In addition to the related-party transactions described in Notes 3 and 6, during the quarter ended December 31, 2019, a member of the Board of Directors, William Matlack, participated in a private placement offering of Units of the Company, purchasing 7,500,000 units for total proceeds of $600,000. Mr. Matlack subscribed to 7,125,000 units for a total of $570,000. See Note 7 for details of the private placement. In connection with the definitive agreement with AGEI for the purchase of two joint venture interests during the fiscal year ended September 30, 2018, Mr. Donald J. McDowell and Mr. Dave Mathewson were appointed to the Company’s Board of Directors on June 21, 2018. Mr. McDowell is the majority owner of AGEI and is the beneficial owner of the majority of the consideration for the Transaction. Therefore, he is the beneficial owner of the majority of the 5,000,000 Class G warrants issued to AGEI at December 31, 2018 . During the quarter ended December 31, 2018, the Company issued 100,000 stock options to acquire shares of common stock of the Company to Mr. Ted R. Sharp, the Company’s Chief Financial Officer, appointed to the position in September of 2018. The options were valued at $5,000 based on a fair value computation using a Black-Scholes model at the date of grant. During the quarter ended December 31, 2018, two executive officers participated in a private placement offering of Units of the Company purchasing, in the aggregate, 1,062,500 units for proceeds of $85,000. Each Unit was priced at $0.08 and consisted of one share of common stock of the Company and one common share Class E Warrant, with each warrant exercisable to acquire an additional share of common stock of the Company at a price of $0.14 per share until April 30, 2021. The participation of the executive officers of the Company was done at the same terms as the other investors in the private placement offering. The Board of Directors approved the insiders’ participation in the private placement.

Note 5 - Payment Obligation

Note 5 - Payment Obligation	3 Months Ended
	Dec. 31, 2019
Notes
Note 5 - Payment Obligation:	NOTE 5 – PAYMENT OBLIGATION: On September 12, 2017, the Company entered into an agreement (the “Payment Agreement”) with a creditor (the “Creditor”) to pay by way of a payment plan an existing obligation of $250,000 (the “Payment Obligation”) related to a potential corporate transaction in 2015 that was not completed. Pursuant to the Payment Agreement, the Company agreed to pay the Payment Obligation to the Creditor, including interest, on or before September 12, 2020. Interest accrues on the unpaid principal amount of the Payment Obligation at the Wells Fargo Bank prime rate (4.75% at December 31, 2019), as such rate may change from time to time, plus 3% per annum. The Company agreed to pay the Creditor 5% of the gross proceeds of any funds raised, whether through equity sales, borrowings or sales of assets. If the gross proceeds of any equity financing are at least $1 million, then the Company agreed to also commence monthly installment payments of $10,000 until the Payment Obligation is paid. On December 30, 2019, the Company entered into Addendum 1 to the Payment Agreement under which Creditor has agreed to waive a default condition in consideration of a $5,000 fee and a payment of $12,500, 5% of the second Senior unsecured note of $250,000. Payment of the remaining $40,470 of delinquent amounts, representing 5% of thee private placements of $80,000, $160,000 and $269,395 respectively and 5% on a Senior unsecured notes payable totaling $300,000, will be paid from the next equity or debt raise in addition to any 5% fee due thereon. The obligation to commence monthly installment payments of $10,000 until the Payment Obligation is paid has not yet been triggered because the Company has not completed a financing with gross proceeds of at least $1 million. The due date of the Payment Agreement was not modified by the Addendum. During the quarter ended December 31, 2019, the Company paid $42,500 including interest of $14,206 to the Creditor. At December 31, 2019, an additional cash payment of $40,470 is due to the Creditor. The balance of the Payment Obligation was $150,239 and $178,533 at December 31, 2019 and September 30, 2019, respectively.

Note 6 - Senior Unsecured Note

Note 6 - Senior Unsecured Note Payable - Related Party	3 Months Ended
	Dec. 31, 2019
Notes
Note 6 - Senior Unsecured Note Payable - Related Party:	NOTE 6 – SENIOR UNSECURED NOTE PAYABLE – RELATED PARTY: On July 30, 2018, the Company entered into a loan agreement and promissory note with William Matlack, a significant shareholder and a director as of October 29, 2019, (the “Lender”), thereafter becoming a related party. Under the loan agreement, the Lender loaned the Company $300,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on January 20, 2020, but may be repaid early without penalty. Pursuant to the terms of the loan agreement, the Company issued to the Lender 3,265,500 non-transferrable Series F Warrants to purchase common shares of the Company. The exercise price of the warrants was $0.09, and the warrants contained a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Company’s outstanding common shares. The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $110,900, based upon a total fair value as calculated by a Black-Scholes option-pricing model. On October 4, 2019, the Company entered into an agreement with the note holder to extend the due date of the note for a period of three years to mature on January 20, 2023, with the terms of the original note staying the same. The Series F Warrants were cancelled and replaced with 4,000,000 Series K Warrants issued solely in relation to the extension of the note, with expiration at February 1, 2023 and an exercise price of $0.08. As a result of the extension of the due date, this note has been included in long-term debt on the Company’s consolidated balance sheet. The modifications to the terms of this note are being accounted for as a Troubled Debt Restructure and extinguishment of debt under ASC 470-60-55 Debt Series K Warrants Issued October 4, 2019 Series F Warrants Canceled October 4, 2019 Expected volatility 147.20% 147.20% Stock price on date of grant $0.07 $0.07 Exercise price $0.08 $0.09 Expected dividends - - Expected term (in years) 3.333 .333 Risk-free rate 1.34% 1.34% Expected forfeiture rate 0% 0% The unamortized discount related to the Series F warrants was $25,111. The net difference in the fair values of the warrants of $170,500, together with the unamortized discount, were recorded as a loss on extinguishment of debt of $195,611 in the quarter ended December 31, 2019. At December 31, 2019, the note payable was $300,000, with all discounts fully amortized. At September 30, 2019, the note payable was $274,889, which is net of the unamortized discount of $25,111. On May 8, 2019, the Company entered into an additional binding loan agreement and promissory note with William Matlack (the “Lender”). Under the loan agreement, the Lender loaned the Company $250,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on November 7, 2020, but may be repaid early without penalty. Pursuant to the terms of the May 8, 2019 loan agreement, the Company issued to the Lender 3,543,600 non-transferrable Series I Warrants to purchase common shares of the Company. The exercise price of the warrants is $0.07, with a term of eighteen months, and the warrants contain a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Company’s outstanding common shares. The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $94,300, based upon a total fair value as calculated by a Black-Scholes option-pricing model. The relative fair value of the warrants was recorded as a discount of the note, with $16,017 amortized to interest expense in the quarter ended December 31, 2019. At December 31, 2019, the note payable was $193,383, net of the unamortized discount of $56,617. At September 30, 2019, the note payable was $177,366, net of the unamortized discount of $72,634. Warrants Issued During the Year Ended September 30, 2019 Expected volatility 138.5% Stock price on date of the note $0.07 Exercise price $0.07 Expected dividends - Expected term (in years) 1.5 Risk-free rate 2.26% Expected forfeiture rate 0% The amortization of discounts was $34,907 and $20,071 for the quarters ended December 31, 2019 and 2018, respectively. The accrued interest on the senior unsecured notes payable was $86,953 and $25,314 at December 31, 2019 and September 30, 2019, respectively. Interest expense related to the Senior unsecured notes payable to this related party was $26,160 for the three months ended December 31, 2019, and $73,714 for the year ended September 30, 2019. The senior unsecured notes payable are senior to all other debt with the exception of the Payment obligation. The notes require that when the Company enters into any other financings, 25% of the proceeds of such financings will be paid toward reduction of the principal and interest accrued on these notes. No such payments have been made by the Company to the Lender, and the Lender has provided a waiver of default on the Notes that would otherwise exist due to these non-payments.

Note 7 - Common Stock and Warra

Note 7 - Common Stock and Warrants	3 Months Ended
	Dec. 31, 2019
Notes
Note 7 - Common Stock and Warrants:	NOTE 7 – COMMON STOCK AND WARRANTS: Common Shares - Private Placement On October 23, 2019, the Company closed a private placement offering of 7,500,000 Units of the Company at a price of US$0.08 per Unit, for total proceeds to the Company of $600,000. Each Unit consisted of one share of common stock of the Company and one-half common share purchase Class J Warrant (each whole such warrant a “Warrant”), with each Warrant exercisable to acquire an additional share of common stock of the Company at a price of US$0.12 per share until the Warrant expiration date of October 15, 2024. As a result, 7,500,000 shares of common stock of the Company and 3,750,000 Warrants were issued and 3,750,000 shares of common stock were reserved for issuance pursuant to Warrant exercises. A director of the Company, William Matlack, participated in the Offering and subscribed for 7,125,000 Units. The Warrants comprised in Mr. Matlack’s Units contain a voluntary restriction on exercise preventing Mr. Matlack from completing any Warrant exercise if such exercise would cause him to beneficially own or control 20% or more of the issued and outstanding common shares of the Company. The fair value of warrants was determined with a Black-Scholes option-pricing model to be $266,500. The assumptions used to calculate fair values are noted in the following table: Series J Warrants Issued October 23, 2019 Expected volatility 149.30% Stock price on date of the note $0.08 Exercise price $0.12 Expected dividends - Expected term (in years) .5 5 Risk-free rate 1.58% Expected forfeiture rate 0% The fair value of the warrants was charged to additional paid-in capital as a deemed dividend, due to the warrants being issued with common shares and being immediately exercisable. Warrants During the quarter ended December 31, 2019, there were 3,750,000 Series J Warrants issued pursuant to the private placement offering and 4,000,000 Series K Warrants issued pursuant solely to extension of the Senior unsecured note payable, with 3,265,500 Series F Warrants canceled in connection with the extension. Additionally, there were 3,367,441 Series H Warrants issued pursuant to PM&G’s participation in a private placement in July 2019 that had not been issued or included in the September 30, 2019 warrants outstanding. As a result of these issuances, there were 53,541,908 and 45,689,967 warrants outstanding as of December 31, 2019 and September 30, 2019, respectively. The warrants expire from January 31, 2020 through October 15, 2024. The weighted average exercise price was $0.20 and $0.21 as of December 31, 2019 and September 30, 2019, respectively.

Note 8 - Stock-based Awards

Note 8 - Stock-based Awards	3 Months Ended
	Dec. 31, 2019
Notes
Note 8 - Stock-based Awards:	NOTE 8 – STOCK-BASED AWARDS: On October 29, 2019, the Company granted to directors and management stock options to acquire an aggregate of 2,450,000 common shares of the Company’s common stock. The options vested immediately and are exercisable at a price of $0.08 per common share for a period of five years from the date of the grant. Also, in connection with his appointment to the Board of Directors, Mr. Matlack was granted 100,000 options to acquire shares of the Company’s common stock. The options have an exercise price of $0.08 per share, vested immediately, and have a term of five years. The fair value of the option awards granted during the quarter ended December 31, 2019 was $161,100, measured on the date of the grant with a Black-Scholes option-pricing model using the assumptions noted in the following table: Options Granted During the Quarter Ended December 31, 2019 Expected volatility 149.5% Stock price on date of the note $0.07 Exercise price $0.08 Expected dividends - Expected term (in years) 5 Risk-free rate 1.66% Expected forfeiture rate 0% During the quarter ended December 31, 2018, the Board of Directors issued 100,000 stock options to the Chief Financial Officer. The fair value of the option award was $5,000 and measured on the date of the grant with a Black-Scholes option-pricing model. During the quarter ended December 31, 2018, 100,000 options were terminated as a result of the resignation of a member of the Board of Directors. The following is a summary of options issued and outstanding at December 31, 2019: Options Weighted Average Exercise Price Outstanding at September 30, 2018 3,280,000 $ 0.26 Granted 100,000 0.10 Terminated (100,000) (0.10) Outstanding at September 30, 2019 3,280,000 0.26 Granted 2,550,000 0.08 Expired (180,000) (0.48) Outstanding and exercisable at December 31, 2019 5,650,000 $ 0.17 The aggregate of options exercisable as of December 31, 2019 had an intrinsic value of nil, based on the closing price of $0.07 per share of the Company’s common stock on December 31, 2019.

Note 9 - Commitments and Contin

Note 9 - Commitments and Contingencies	3 Months Ended
	Dec. 31, 2019
Notes
Note 9 - Commitments and Contingencies:	NOTE 9 – COMMITMENTS AND CONTINGENCIES: Mineral Exploration The Company has the following commitments and contingencies: The Elder Creek Project is subject to certain future work expenditure requirements in order for the Company to earn an ownership portion of the property. The Year 1 and Year 2 work commitments were completed by December 31, 2018 and December 31, 2019, respectively: · · · A portion of the Company’s mining claims on the Company’s properties are subject to lease and option agreements with various terms, obligations, and royalties payable in certain circumstances. The Company pays federal and county claim maintenance fees on unpatented claims that are included in the Company’s mineral exploration properties. Should the Company continue to explore all of the Company’s mineral properties, it expects annual fees to total approximately $184,906 per year in the future, of which $113,014 is for the two joint venture mineral property interests (See Note 3). The claims maintenance fees for Lookout Mountain LLC are expected to be $97,587 and will be remitted from the earn-in funds provided by PM&G as part of the LLC Agreement. Real Estate Lease Commitments At September 30, 2019, the Company had real estate lease commitments for certain mineral property exploration facilities totaling $72,000 annually. The Company’s office in Coeur d’Alene, Idaho and its facilities in Eureka, Nevada are rented on a month-to-month basis.

Note 10 - Subsequent Events

Note 10 - Subsequent Events	3 Months Ended
	Dec. 31, 2019
Notes
Note 10 - Subsequent Events:	NOTE 10 – SUBSEQUENT EVENTS: There are no subsequent events to be reported at the date of filing of this report.

Note 2 - Summary of Significa_2

Note 2 - Summary of Significant Accounting Policies: a. Going Concern (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
a. Going Concern	a. Going Concern The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

Note 2 - Summary of Significa_3

Note 2 - Summary of Significant Accounting Policies: b. New Accounting Pronouncements (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
b. New Accounting Pronouncements	b. New Accounting Pronouncements - Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Note 2 - Summary of Significa_4

Note 2 - Summary of Significant Accounting Policies: c. Principles of Consolidation (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
c. Principles of Consolidation	c. Principles of Consolidation

Note 2 - Summary of Significa_5

Note 2 - Summary of Significant Accounting Policies: d. Reclassifications (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
d. Reclassifications	d. Reclassifications

Note 2 - Summary of Significa_6

Note 2 - Summary of Significant Accounting Policies: e. Reclamation Bonds (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
e. Reclamation Bonds	e. Reclamation Bonds

Note 2 - Summary of Significa_7

Note 2 - Summary of Significant Accounting Policies: f. Estimates and Assumptions (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
f. Estimates and Assumptions	f. Estimates and Assumptions

Note 2 - Summary of Significa_8

Note 2 - Summary of Significant Accounting Policies: g. Stock-based Compensation (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
g. Stock-based Compensation	g. Stock-based Compensation The value of common stock awards is determined based upon the closing price of the Company’s stock on the grant date of the award. Compensation expense for grants that vest is recognized ratably over the vesting period. The fair value of stock unit or stock awards is determined by the closing price of the Company’s common stock on the date of the grant

Note 2 - Summary of Significa_9

Note 2 - Summary of Significant Accounting Policies: h. Net Income (Loss) per Share (Policies)	3 Months Ended
	Dec. 31, 2019
Policies
h. Net Income (Loss) per Share	h. Net Income (Loss) per Share The dilutive effect of convertible and outstanding securities as of December 31, 2019 and 2018 is as follows: December 31, 2019 December 31, 2018 Stock options 5,650,000 3,280,000 Warrants 53,541,908 49,106,373 Total potential dilution 59,191,908 52,386,373 At December 31, 2019 and 2018, the effect of the Company’s common stock equivalents would have been anti-dilutive.

Note 2 - Summary of Signific_10

Note 2 - Summary of Significant Accounting Policies: h. Net Income (Loss) per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2019
Tables/Schedules
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	December 31, 2019 December 31, 2018 Stock options 5,650,000 3,280,000 Warrants 53,541,908 49,106,373 Total potential dilution 59,191,908 52,386,373

Note 3 - Property, Mineral Ri_2

Note 3 - Property, Mineral Rights, and Equipment: Property, Plant and Equipment (Tables)	3 Months Ended
	Dec. 31, 2019
Tables/Schedules
Property, Plant and Equipment	Expected Useful Lives (years) December 31, 2019 September 30, 2019 Mineral rights – Eureka - $ 13,671,546 $ 13,703,651 Mineral rights – Elder Creek - 1,218,715 1,218,715 Mineral rights – Other - 50,000 50,000 Total mineral rights 14,940,261 14,972,366 Equipment and vehicles 2-5 53,678 53,678 Office equipment and furniture 3-7 70,150 70,150 Land - 51,477 51,477 Total property and equipment 175,305 175,305 Less accumulated depreciation (123,828) (123,828) Property, mineral rights, and equipment, net $ 14,991,738 $ 15,023,843

Note 6 - Senior Unsecured Not_2

Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and canceled (Tables)	3 Months Ended
	Dec. 31, 2019
Loan Agreement and Note
Summary of fair value of warrants issued and canceled	Series K Warrants Issued October 4, 2019 Series F Warrants Canceled October 4, 2019 Expected volatility 147.20% 147.20% Stock price on date of grant $0.07 $0.07 Exercise price $0.08 $0.09 Expected dividends - - Expected term (in years) 3.333 .333 Risk-free rate 1.34% 1.34% Expected forfeiture rate 0% 0%

Note 6 - Senior Unsecured Not_3

Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and outstanding (Tables)	3 Months Ended
	Dec. 31, 2019
Additional Loan Agreement and Note
Summary of fair value of warrants issued and outstanding	Warrants Issued During the Year Ended September 30, 2019 Expected volatility 138.5% Stock price on date of the note $0.07 Exercise price $0.07 Expected dividends - Expected term (in years) 1.5 Risk-free rate 2.26% Expected forfeiture rate 0%

Note 7 - Common Stock and War_2

Note 7 - Common Stock and Warrants: Summary of fair value of series J options issued and outstanding (Tables)	3 Months Ended
	Dec. 31, 2019
Series J
Summary of fair value of series J options issued and outstanding	Series J Warrants Issued October 23, 2019 Expected volatility 149.30% Stock price on date of the note $0.08 Exercise price $0.12 Expected dividends - Expected term (in years) .5 5 Risk-free rate 1.58% Expected forfeiture rate 0%

Note 8 - Stock-based Awards_ Su

Note 8 - Stock-based Awards: Summary of fair value of director options issued and outstanding (Tables)	3 Months Ended
	Dec. 31, 2019
Directors
Summary of fair value of director options issued and outstanding	Options Granted During the Quarter Ended December 31, 2019 Expected volatility 149.5% Stock price on date of the note $0.07 Exercise price $0.08 Expected dividends - Expected term (in years) 5 Risk-free rate 1.66% Expected forfeiture rate 0%

Note 8 - Stock-based Awards_ Sh

Note 8 - Stock-based Awards: Share-based Compensation, Stock Options, Activity (Tables)	3 Months Ended
	Dec. 31, 2018
Tables/Schedules
Share-based Compensation, Stock Options, Activity	Options Weighted Average Exercise Price Outstanding at September 30, 2018 3,280,000 $ 0.26 Granted 100,000 0.10 Terminated (100,000) (0.10) Outstanding at September 30, 2019 3,280,000 0.26 Granted 2,550,000 0.08 Expired (180,000) (0.48) Outstanding and exercisable at December 31, 2019 5,650,000 $ 0.17

Note 2 - Summary of Signific_11

Note 2 - Summary of Significant Accounting Policies: h. Net Income (Loss) per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Details
Stock options	5,650,000	3,280,000
Warrants	53,541,908	49,106,373
Total potential dilution	59,191,908	52,386,373

Note 3 - Property, Mineral Ri_3

Note 3 - Property, Mineral Rights, and Equipment: Property, Plant and Equipment (Details) - USD ($)	3 Months Ended
	Dec. 31, 2019	Sep. 30, 2019
Details
Mineral rights Eureka	$ 13,671,546	$ 13,703,651
Mineral rights Elder Creek	1,218,715	1,218,715
Mineral rights	50,000	50,000
Mineral rights	14,940,261	14,972,366
Equipment and vehicles	53,678	53,678
Office equipment and furniture	70,150	70,150
Land	51,477	51,477
Property, Plant and Equipment, Gross	175,305	175,305
Depreciation, Depletion and Amortization, Nonproduction	(123,828)
Property, mineral rights and equipment, net	$ 14,991,738	$ 15,023,843

Note 3 - Property, Mineral Ri_4

Note 3 - Property, Mineral Rights, and Equipment (Details) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Depreciation	$ 0	$ 0
Proceeds from lease of mineral rights	$ 32,105	$ 25,594
Elder Creek
Equity Method Investment, Description of Principal Activities	The Company met the 2018 work commitment, and issued 5,000,000 Class G warrants during the quarter ended December 31, 2018 as required by the amended agreement, which were fair valued at $176,000 on the date the commitment was satisfied.
Lookout Mountain
Equity Method Investment, Description of Principal Activities	On June 28, 2019, the Company entered into a Limited Liability Company Agreement to form a Limited Liability Company (the “Agreement”) with PM&Gold Mines, Inc. (“PM&G”) for the advanced exploration, and if determined feasible, the development of the Company’s Lookout Mountain Gold project.

Note 4 - Related-party Transa_2

Note 4 - Related-party Transactions (Details)	3 Months Ended
	Dec. 31, 2018USD ($)shares
Details
Related Party Transaction, Description of Transaction	In connection with the definitive agreement with AGEI for the purchase of two joint venture interests during the fiscal year ended September 30, 2018, Mr. Donald J. McDowell and Mr. Dave Mathewson were appointed to the Company’s Board of Directors on June 21, 2018.
Stock options issued to officer	100,000
Stock options issued to officer, value | $	$ 5,000
Private placement units sold to related parties	1,062,500
Private placement units sold to related parties, value | $	$ 85,000
Private placement units sold to related parties, price per unit	0.08

Note 5 - Payment Obligation (De

Note 5 - Payment Obligation (Details) - USD ($)	Sep. 12, 2017	Dec. 31, 2019	Dec. 31, 2018
Details
Debt Instrument, Description	On September 12, 2017, the Company entered into an agreement (the “Payment Agreement”) with a creditor (the “Creditor”) to pay by way of a payment plan an existing obligation of $250,000 (the “Payment Obligation”) related to a potential corporate transaction in 2015 that was not completed.
Payment obligation		$ 150,239	$ 178,533

Note 6 - Senior Unsecured Not_4

Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and canceled (Details)	3 Months Ended
	Dec. 31, 2019$ / shares
Series K issued
Expected volatility	147.20%
Stock price on date of grant	$ 0.07
Exercise price	$ 0.08
Expected term simplified	3.333
Risk free interest rate	1.34%
Expected forfeiture rate	0.00%
Series F canceled
Expected volatility	147.20%
Stock price on date of grant	$ 0.07
Exercise price	$ 0.09
Expected term simplified	.333
Risk free interest rate	1.34%
Expected forfeiture rate	0.00%

Note 6 - Senior Unsecured Not_5

Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and outstanding (Details) - Issued during the year	3 Months Ended
	Dec. 31, 2019$ / shares
Expected volatility	138.50%
Stock price on date of grant	$ 0.07
Exercise price	$ 0.07
Expected term simplified	1.5
Risk free interest rate	2.26%
Expected forfeiture rate	0.00%

Note 7 - Common Stock and War_3

Note 7 - Common Stock and Warrants: Summary of fair value of series J options issued and outstanding (Details)	3 Months Ended
	Dec. 31, 2019$ / shares
Series J Issued
Expected volatility	149.30%
Stock price on date of grant	$ 0.08
Exercise price	$ 0.12
Expected term simplified	.55
Risk free interest rate	1.58%
Expected forfeiture rate	0.00%
Series J
Stock price on date of grant	$ 0.07

Note 8 - Stock-based Awards_ _2

Note 8 - Stock-based Awards: Summary of fair value of director options issued and outstanding (Details)	3 Months Ended
	Dec. 31, 2019$ / shares
Directors
Expected volatility	149.50%
Exercise price	$ 0.08
Expected term simplified	5
Risk free interest rate	1.66%
Expected forfeiture rate	0.00%
Series J
Stock price on date of grant	$ 0.07

Note 8 - Stock-based Awards_ _3

Note 8 - Stock-based Awards: Share-based Compensation, Stock Options, Activity (Details) - $ / shares	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019
Details
Weighted Average Exercise Price, Outstanding	$ 0.17		$ 0.26
Weighted Average Exercise Price, Granted	0.08	$ 0.10
Weighted Average Exercise Price, Expired	$ (0.48)	$ (0.10)

Note 9 - Commitments and Cont_2

Note 9 - Commitments and Contingencies (Details)	12 Months Ended
	Sep. 30, 2018
Elder Creek
Other Commitments, Description	The Elder Creek Project is subject to certain future work expenditure requirements in order for the Company to earn an ownership portion of the property.
Mining Claims
Other Commitments, Description	A portion of the Company’s mining claims on the Company’s properties are subject to lease and option agreements with various terms, obligations, and royalties payable in certain circumstances.
Claim Maintenance Fees
Other Commitments, Description	The Company pays federal and county claim maintenance fees on unpatented claims that are included in the Company’s mineral exploration properties. Should the Company continue to explore all of the Company’s mineral properties, it expects annual fees to total approximately $184,906 per year in the future, of which $113,014 is for the two joint venture mineral property interests (See Note 3). The claims maintenance fees for Lookout Mountain LLC are expected to be $97,587 and will be remitted from the earn-in funds provided by PM&G as part of the LLC Agreement.
Real Estate Commitments
Other Commitments, Description	At September 30, 2019, the Company had real estate lease commitments for certain mineral property exploration facilities totaling $72,000 annually. The Company’s office in Coeur d’Alene, Idaho and its facilities in Eureka, Nevada are rented on a month-to-month basis.