Piedmont Mining 10-Q 2011 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended March 31, 2011

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

For the transition period from _____ to _____.

Commission File No.  001-34075

PIEDMONT MINING COMPANY, INC.

(Exact Name of Registrant as Specified in Its Charter)

North Carolina	56-1378516
(State or Other Jurisdiction Of Incorporation or Organization)	(I.R.S. Employer Identification Number)
18124 Wedge Parkway, Suite 214 Reno, Nevada	89511
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (212) 734-9848

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes x                                No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( § 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 Yes o                              No o

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o                    No x

As of May 16, 2011 there were 78,376,025 outstanding shares of the issuer’s common stock.

PIEDMONT MINING COMPANY, INC.

FORM 10-Q INDEX

	Page Number
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets	3
Consolidated Statements of Loss	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis or Plan of Operations	10
Item 3. Quantitative and Qualitative Disclosures About Market Risks	12
Item 4. Controls and Procedures	12
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	13
Item 1A. Risk Factors.	13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3. Defaults Upon Senior Securities	13
Item 4. [Removed and Reserved]	13
Item 5. Other Information	13
Item 6. Exhibits	13
Signature Page	14

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

	March 31, 2011			December 31, 2010
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$	82		$	176
Promissory note receivable (Notes 8 and 9)		479,290			-
		479,372			176
RECLAMATION BOND (Note 3)		11,566			11,566
MINERAL PROPERTY (Note 3)		1			1
INTEREST IN OIL LEASES (Note 2)		2			2
	$	490,941		$	11,745
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	401,329		$	366,534
Due to related parties (Note 5)		815,967			754,685
TOTAL LIABILITIES		1,217,296			1,121,219
STOCKHOLDERS’ DEFICIT
CAPITAL STOCK (Note 6)
Authorized: 200,000,000 Common stock no par value 50,000,000 Preferred stock $1.00 par value Common stock issued and outstanding:   78,376,025 shares (December 31, 2010 – 78,376,025)		16,825,810			16,825,810
Series A Preferred stock  issued and outstanding: 200,000  shares (December 31, 2010 – nil)		479,290			-
ADDITIONAL PAID IN CAPITAL		872,643			872,643
ACCUMULATED DEFICIT		(12,564,287	)		(12,564,287	)
DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE		(6,339,811	)		(6,243,640	)
STOCKHOLDERS’ DEFICIT		(726,355	)		(1,109,474	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	490,941		$	11,745

CONTINGENCIES (NOTES 1 & 4)

SUBSEQUENT EVENTS (Note 9)

The accompanying notes are an integral part of these consolidated financial statements.

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PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended March 31, 2011			Three months ended March 31, 2010			For the Period from January 1, 2002 (Date of Inception of Exploration Stage) to March 31, 2011
REVENUES
Oil revenues	$	-		$	-		$	3,233
EXPENSES
Depreciation		-			-			146,383
Exploration, geological and geophysical costs		54			577			2,347,353
Finance fees		-			-			191,200
General and administrative (Note 5)		11,727			12,319			1,001,375
Impairment of mineral properties		-			-			341,974
Management fees (Note 5)		42,000			42,000			1,224,872
Professional fees		42,390			31,447			1,075,622
		96,171			86,343			6,328,779
LOSS BEFORE OTHER ITEMS		(96,171	)		(86,343	)		(6,325,546	)
INTEREST AND OTHER INCOME		-			-			32,325
OTHER NON-OPERATING LOSSES		-			-			(46,590	)
NET LOSS FOR THE PERIOD	$	(96,171	)	$	(86,343	)	$	(6,339,811	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		78,376,025			71,236,976
BASIC AND DILUTED LOSS PER SHARE	$	(0.001	)	$	(0.001	)

The accompanying notes are an integral part of these consolidated financial statements.

4

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three months ended March 31, 2011			Three months ended March 31, 2010			For the Period from January 1, 2002 (Date of Inception of Exploration Stage) to March 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(96,171	)	$	(86,343	)	$	(6,339,811	)
Adjustments to reconcile net loss to net cash from operating activities
- depreciation		-			-			146,383
- impairment of mineral properties		-			-			341,975
- stock based compensation		-			-			409,468
- warrants issued as finance fee		-			-			92,100
-non-cash expenses								47,468
- stock issued as finance fee		-			-			100,000
- other income		-			-			21,100
- loss on other non-operating activities		-			-			(21,000	)
Changes in operating assets and liabilities:
- prepaid expenses and other		-			-			949
- due to related parties		61,282			50,940			720,760
- accounts payable and accrued liabilities		34,795			2,259			643,875
NET CASH USED IN OPERATING ACTIVITIES		(94	)		(33,144	)		(3,836,733	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Refund of reclamation bond		-			-			1,797
Purchase of property and equipment		-			-			(5,579	)
Purchase of oil and gas interests		-			-			(2	)
Mineral property costs		-			-			(296,042	)
Proceeds from non-operating activities		-			-			97,125
NET CASH USED IN INVESTING ACTIVITIES		-			-			(202,701	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares for cash, net of issuance costs					17,500			3,747,674
Convertible notes		-			-			291,145
NET CASH FROM FINANCING ACTIVITIES					17,500			4,038,819
DECREASE IN CASH		(94	)		(15,644	)		(615)
CASH, BEGINNING		176			16,466			697
CASH, ENDING	$	82		$	822		$	82

SUPPLEMENTARY CASH FLOW INFORMATION (Note 7)

The accompanying notes are an integral part of these consolidated financial statements.

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NOTE 1:              NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Piedmont Mining Company, Inc. (the “Company”) was formed in 1983 under the laws of North Carolina, USA and is currently in the exploration stage. Since 2002 the Company has been primarily involved in the evaluation and exploration of mineral properties in the state of Nevada.  The Company’s focus has been on the exploration of gold and silver properties in Nevada.

Going Concern

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America with the assumptions applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

The Company is in the exploration stage and to date has not yet generated any net revenues or cash flow from its activities, except for some minor cash flow from interests in two oil wells and advances from management. The Company has a history of losses and has a working capital deficit of $737,924 and an accumulated deficit of $18,904,098 at March 31, 2011.  The Company is dependent on the continued support of its creditors and its ability to raise further capital to fund ongoing expenditures for exploration and administration. In the current market conditions there is uncertainty that the necessary funding can be obtained as needed, raising substantial doubt as to the ability of the Company to continue as a going concern.  These financial statements do not reflect any adjustments to the carrying values of assets that might result from the outcome of this uncertainty.

The Company plans to fund its ongoing operations primarily by way of private placements of its securities and advances from management. Management believes that advances from management will contribute toward funding the Company’s activities until appropriate levels of funding can be arranged and/or revenue can be earned from the properties either through production or sale. If the Company is unsuccessful in obtaining adequate funding, its proposed activities will continue to be postponed until market conditions improve.

On March 4, 2011, the Company entered into a Reorganization and Share Exchange Agreement.  (Refer to Note 8)

Unaudited Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statement disclosure. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2010, included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 24, 2011. The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

Recent accounting pronouncements with future effective dates are not expected to have an impact on the Company’s current financial statements

NOTE 2:                      INTEREST IN OIL LEASES

The Company was granted interests in two oil wells in Tennessee in consideration for $2 consisting of a 10.5% undivided working interest in one well and a 6% over-riding royalty interest in another.  There was no cash flow from oil production in 2010 or 2011.

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NOTE 3:              MINERAL PROPERTY

The Company has entered into exploration agreements as described below. A summary of the carrying amount of capitalized costs is as follows:

	March 31, 2011	December 31, 2010
Mineral Property
PPM Gold	$             1	$             1

	March 31, 2011	December 31, 2010
Reclamation Bonds
PPM Gold	$    11,566	$    11,566

PPM Gold Project

In April, 2007, the Company signed an “Exploration Agreement with Option to form Joint Venture” (the “Exploration Agreement”) with Miranda US, Inc., a wholly-owned subsidiary of Miranda Gold Corp. (“Miranda”), a Canadian corporation listed on the TSX Venture Exchange.

Under the terms of the Exploration Agreement, the Company has an option to earn a 55% interest in mining claims, located in Humboldt County, Nevada in consideration of incurring $1,750,000 in exploration work over a five year period.

The Company has not been able to meet its work commitment requirements in a timely manner due to a lack of adequate funding.  The Company is in discussions with Miranda about its continued participation in this project and the possible resumption of exploration activities when further funds become available. As a result, the Company wrote down the carrying value of this project to $1 at December 31, 2009.

NOTE 4:                      CONTINGENCY

During the year ended December 31, 2010, the Company was advised by its attorneys that a third party claimed a balance of $87,372 for uncompleted work expenditure requirements owing to them under a previous agreement.  The Company believes this claim is without foundation or merit and is disputing the amount.  The Company has not recorded a liability in relation to the foregoing matter as the amount and likelihood of loss, if any, cannot be determined at this time.

NOTE 5:                      DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2011 the Company incurred management fees of $42,000 (2010: $42,000) to the Company’s President and CEO. In addition, the Company reimbursed the President for office rent which totaled $4,800 for the three months ended March 31, 2011 (2010: $4,800).  At March 31, 2011, a balance of $608,981 (December 31, 2010: $561,039) was owing to the President and CEO for unpaid management fees, rent and expense reimbursements.

During the three months ended March 31, 2011, the Company incurred exploration costs and fees of $0 (2010: $420) to the Company’s Vice-President.  At March 31, 2011 a balance of $33,668 (December 31, 2010: $33,668) was owing to the Vice-President for unpaid fees, exploration costs and expense reimbursements.

From time to time, the Company’s officers and directors advance loans to the Company. These loans bear interest at 5% per annum. These loans are unsecured and have no fixed repayment terms. The unpaid balance relating to these advances, which include accrued interest, at March 31, 2011 was $173,318 (December 31, 2010: $159,978).

No stock options were granted to officers or directors by the Company for the three month period ended March 31, 2011.  All related party transactions involving provision of services or transfer of tangible assets in the normal course of business were recorded at the exchange amount, which is the value established and agreed to by the related parties.

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NOTE 6:                      CAPITAL STOCK

Share Capital

The Company’s capitalization is 50,000,000 authorized preferred shares with a par value of $1.00 per share and 200,000,000 common shares with no par value.

Preferred Stock transactions:

On March 4, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with FRAC (the “Series A Purchase Agreement”), pursuant to which FRAC purchased an aggregate of 200,000 shares of Company’s Series A Preferred Stock, for an aggregate purchase price of $479,290, which was paid in the form of a promissory note with the indebtedness represented by such note to be due and payable in full at the contemplated Closing (the “Note”). In the event the Share Exchange Agreement is terminated, FRAC will return the shares of Series A Preferred Stock in exchange for cancellation of the promissory note issued in connection with the purchase of such shares.

Common share transactions:

During the three months ended March 31, 2011, the Company did not have any common share transactions.

Stock-Based Compensation and Other Equity Transactions

The Company does not have a stock-based compensation plan. The Company’s Compensation Committee makes recommendations to the Board of Directors for the granting of awards of stock options to its officers and directors on a discretionary basis.

No stock options were granted during the three months ended March 31, 2011

Below is a summary of the stock option activity for the three months ended March 31, 2011.

	Number of Options			Weighted Average Exercise Price
Total Options:
Outstanding, December 31, 2010		4,250,000		$	0.245
Expired March 31, 2011		(1,200,000	)		0.20
Outstanding, March 31, 2011		3,050,000		$	0.251

The following tables summarize information and terms of the options outstanding and exercisable:

					Weighted
		Weighted			Average
		Average	Weighted		Remaining	Weighted
		Remaining	Average		Contractual	Average
Range of Exercise Prices	Number of Shares	Contractual Life (in years)	Exercise Price	Number of Shares	Life (in years)	Exercise Price
Options outstanding at March 31, 2011				Options exercisable at March 31, 2011
$ 0.25 – 0.28	3,050,000	0.576	$      0.251	3,050,000	0.576	$     0.251
Options outstanding at December 31, 2010				Options exercisable at December 31,2010
$ 0.23 – 0.28	4,250,000	0.62	$      0.245	4,250,000	0.62	$     0.245

Common stock purchase warrants

Total outstanding warrants at March 31, 2011 were 2,737,500. The exercise prices on all warrants range from $0.03 to $0.16 per share. The warrants are exercisable immediately upon issuance and expiration dates range from two and five years from the date of issuance.

During the three months ended March 31, 2011, the Company did not issue any warrants.

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NOTE 6:                      CAPITAL STOCK (continued)

A summary of the Company’s stock purchase warrants as of March 31, 2011 is presented below:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life (years)
Balance, December 31, 2010		3,162,500			0.057		1.52
Expired		(425,000	)		0.112		-
Balance, March 31, 2011		2,737,500			0.049		0.15

NOTE 7: SUPPLEMENTAL CASH FLOW INFORMATION

Other information	Three months ended March 31, 2011		Three months ended March 31, 2010
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-

NOTE 8:                      REORGANIZATION AND SHARE EXCHANGE AGREEMENT

On March 4, 2011, the Company entered into a Reorganization and Share Exchange Agreement (the “Share Exchange Agreement”) with Financial Resolutions of America Corporation (“FRAC”), a California corporation which operates a judgment recovery business using its proprietary servicing platform, and all of FRAC’s shareholders.  Pursuant to the agreement, the FRAC Shareholders would exchange all of the common stock of FRAC owned by them, representing all of the issued and outstanding shares of common stock of FRAC, for shares of Series C Preferred Stock of the Company (the “Exchange”).  Upon consummation of the proposed Exchange, it was contemplated that FRAC shareholders will hold shares in the Company and FRAC will become a wholly owned subsidiary of the Company.

Concurrently with the Share Exchange Agreement and as contemplated therein, on March 4, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with FRAC (the “Series A Purchase Agreement”), pursuant to which FRAC purchased an aggregate of 200,000 shares of Company’s Series A Preferred Stock, which in the aggregate represent voting rights equal to approximately 70% of the Company’s total voting power, for an aggregate purchase price of $479,290, which was paid in the form of a promissory note with the indebtedness represented by such note to be due and payable in full at the contemplated Closing (the “Note”). In the event the Share Exchange Agreement is terminated, FRAC will return the shares of Series A Preferred Stock in exchange for cancellation of the promissory note issued in connection with the purchase of such shares.

In connection with the transactions contemplated by the Share Exchange Agreement, the Company filed Articles of Amendment to designate shares of Series A Preferred Stock and Series B Preferred Stock as follows:

·   Designation of Series A Preferred Stock.  On March 4, 2011, the Company filed Articles of Amendment amending the Company’s Articles of Incorporation to designate 200,000 shares of the Company’s authorized Preferred Stock as Series A Preferred Stock. Shares of Series A Preferred Stock have been designated with the following rights, privileges, and preferences:  Each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes, and the right to vote, together as a single class with holders of all common stock and preferred stock then outstanding, on any question or matter upon which holders of the Company’s common stock are entitled to vote.  Shares of Series A Preferred Stock shall not entitle the holders thereof to any dividends or liquidation preferences and such shares shall not be convertible into any other security of the Company.

·   Designation of Series B Preferred Stock.  On March 4, 2011, the Company filed Articles of Amendment amending the Company’s Articles of Incorporation to designate 10,000,000 shares of the Company’s authorized Preferred Stock as Series B Preferred Stock.  Shares of Series B Preferred Stock have been designated with the following rights, privileges, and preferences: Each share of Series B Preferred Stock shall automatically convert into shares of the Company’s post-Reverse Split Common Stock at a rate of one post-Reverse Split share of the Company’s Common Stock.

On March 30, 2011, the Reorganization and Share Exchange Agreement was extended to April 30, 2011.

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NOTE 9:                      SUBSEQUENT EVENTS

On April 30, 2011 the Reorganization and Share Exchange Agreement was terminated with no further obligations on either side. Accordingly, the Series A Preferred Common Stock was returned to the Company in exchange for cancellation of the promissory note originally issued for such shares.  No Series B Preferred Stock were issued.

Management has evaluated events occurring between the end of its fiscal quarter March 31, 2011 to the date of filing.

Item 2. Management’s Discussion And Analysis Or Plan Of Operations

Forward-Looking Statements and Associated Risks.

Except for statements of historical facts, this report contains forward-looking statements involving risks and uncertainties. You can identify these statements by forward-looking words including “believes,” “considers,” “intends,”  “expects,” “may,” “will,” “should,” “forecast, “ or “anticipates,” or the equivalents of those words or comparable terminology, and by discussions of strategies that involve risks and uncertainties. Forward-looking statements are not guarantees of our future performance or results, and our actual results could differ materially from those anticipated in these forward-looking statements. We wish to caution readers to consider the important factors, among others, that in some cases have affected, and in the future could affect our actual results and could cause actual consolidated results for future fiscal years to differ materially from those expressed in any forward-looking statements made by us or on our behalf. These factors include without limitation, our ability to obtain capital and other financing in the amounts and at the times needed, identification of suitable exploration properties for acquisition, the successful discovery of gold, silver or other precious metals in quantities economically feasible for profitable production, changes in gold and silver prices, changes in the political climate for gold and silver exploration, and other risk factors listed from time to time in our Securities and Exchange Commission reports, including in particular the factors and discussions under the heading “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2010  that was filed with the Securities and Exchange Commission on March 24, 2011.

Overview of Business

The Company is a North Carolina corporation that was formed in 1983. From its inception until 1992, it was engaged in exploration for, and production of, gold and other precious metals and the evaluation of gold properties in North Carolina and South Carolina. From 1983 until 1992 it was engaged in exploration, mining and production of gold and silver at its Haile Gold Mine Property near Kershaw, South Carolina. Operations ceased at the Haile Mine Property in 1993.  The Company did not again become engaged in exploration activities until 2004, when it relocated its principal place of business to Reno, Nevada. Since October 2003, we have been an exploration stage company engaged in exploration for gold and silver in the state of Nevada.

We currently have option agreements on exploration properties in the state of Nevada. Subject to the availability of adequate funding, we plan to conduct exploration for gold and silver on these properties and possibly at other properties we may enter into agreements on to assess whether they possess economic deposits of gold and/or possibly silver which could be recovered at a profit. We do not know whether a commercially viable ore body will be located on any of these properties.  Our current exploration plans are limited due to inadequate funding.

Although we obtained a small amount of cash flow from our interest in two oil wells in Tennessee during the third quarter of 2009, there is no assurance that we will receive any cash flow in the future.  Our ability to continue our exploration activities, fund ongoing expenditures, and continue as a going concern is dependent on our ability to obtain additional capital.  We plan to fund our operations by private placements of securities, transactions with other entities, cash flows from interests in small oil wells and advances from our management.  Management believes continued efforts to sell securities as well as advances from management should contribute toward funding the Company’s ongoing expenses until appropriate levels of funding can be arranged to conduct exploration, or revenue earned from production.  In light of the conditions of the global economy, there is no guarantee that we will be able to raise the required capital to continue as a going concern.

Going Concern

The report of our independent auditors in our December 31, 2010 financial statements includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to recurring losses from operations, an accumulated deficit of $18,807,927 and a working capital deficit of $1,121,041 at December 31, 2010. Our ability to continue as a going concern will be determined by our ability to raise adequate funds and conduct one or more successful exploration programs. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a wide variety of estimates and assumptions that affect: (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations.

Results of Operations

Discussion of Revenues

In the third quarter of 2009, we received our first revenues from interests in two small oil wells for a total of $3,233.We have not received any revenues during the three months ended  March 31, 2011, and there is no assurance that we will receive any revenues in the future.

We do not anticipate that any significant revenues will be achieved from gold and silver exploration properties until we:

·   Obtain financing to continue our operations; or

·   Enter into a joint venture with a third party.

There is no guarantee that we will obtain the financing required to continue our operations. In addition, in the event we are able to secure funds to continue our exploration projects, there is no assurance that our exploration activities will locate viable gold and/or silver reserves, or if an economic mineral deposit were discovered that we would be able to commence commercial production, or that if we do locate viable mineralization that we would be able to secure the funding necessary to proceed with the mining and production of ore.

                      Expenses for the Three Month Period ended March 31, 2011 vs March 31, 2010

Exploration, geological and geophysical costs which includes impairment of mineral properties, decreased by $523, or 90.64% to $54 for the three months ended March 31, 2011 as compared to $577 for the three months ended March 31, 2010.  The principal reason for this decrease was a reduction in exploration activities due to a lack of funding.

General and administrative expenses decreased by $592 or 4.8% to $11,727 for the three months ended March 31, 2011 as compared to $12,319 for the three months ended March 31, 2010.  The principal reasons for this change was a reduction in travel and related expenses by the Company’s President and CEO and an increase in interest expense and public reporting.

Management fees of $42,000 were the same for the three months ended March 31, 2011 as compared to the three months ended  March 31, 2010.

For the three months ended March 31, 2011, professional fees increased by $10,943, or 34.8%  to $42,390 as compared to $31,447 for the three months ended March 31, 2010.  This change for the three month period is due to an increase in legal fees of $10,387 for business opportunities work.

Liquidity and Financial Condition

Cash and Working Capital

The Company is in the exploration stage and to date it has not yet generated any revenues or cash flow from its activities, except for some minor cash flow from interests in two small oil wells in 2009. The Company has had a history of losses.  We had an accumulated deficit of $18,807,927 from our inception in 1983 to December 31, 2010, and an accumulated deficit of $18,904,098 at March 31, 2011.  We had a working capital deficit of $737,924 at March 31, 2011 and $1,121,041 at December 31, 2010.  We have no long-term obligations, except for our exploration work commitments described under our property agreements on our optioned properties.

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We had a cash balance of $176 on December 31, 2010 and a cash balance of $82 on March 31, 2011.  For the three month period ending March 31, 2011, we had net cash outflows of $94.  We had current liabilities of $1,217,296, which consisted of approximately 33% in accounts payable and 67% in amounts due to related parties for management fees, expenses and reimbursements, as of March 31, 2011.

The cash flows used in operations for the three month period ended March 31, 2011 were $94 compared with $33,144 for the same period in 2010.  Cash flows used in operations for the three month period ended March 31, 2011 consisted primarily of a net loss of $96,171, an increase in accounts payable and accrued liabilities of $32,536, and an increase of $10,342 to accrued expenses for amounts unpaid to related parties, as compared to March 31, 2010.

We had no financing activity during the three months ended March 31, 2011.

Internal and External Sources of Liquidity

During the remaining fiscal year 2011, we expect that our operations will be funded  by advances from management and  payments from outside parties. In addition, we are evaluating, and expect to continue to evaluate, a wide array of potential strategic transactions and relationships with third parties.   However, there is no assurance that we will be able to obtain sufficient funds to support our operations as planned.   We are dependent on the continued support of our creditors, our ability to raise further capital to fund ongoing expenditures. In current market conditions there is uncertainty that the necessary funding can be obtained as needed, raising substantial doubt as to the ability of the Company to continue operating as a going concern.  In the event, we are unable to raise additional capital, we will not be able to meet our obligations and will be required to further curtail or terminate some of our projects and/or activities.

Contractual Obligations

We do not engage in hedging transactions and we have no hedged mineral resources.

At March 31, 2011, our exploration work expenditures, lease and option payments, and claims maintenance payments on properties are as follows.

PPM Gold Project:

 Required work expenditure to April 2008: $175,000, of which $126,027 has been expended;   The Company has not been able to meet its exploration expenditure requirements in a timely manner because of inadequate funds. The timing and amount of additional work will depend upon the timing and amount of funding received.  Both parties wish to continue with the planned exploration program for the property once adequate funding can be obtained to proceed.  

	Claims maintenance fees were paid by Miranda US in August, 2010.
	Annual payments; $0.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

We do not engage in hedging transactions and we have no hedged resources.

Item 3. Quantitative and Qualitative Disclosure About Market Risks

Not Applicable.

Item 4. Controls And Procedures

(A)          Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

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We have reviewed the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our principal executive officer and financial officers concluded that there are some weaknesses in our internal controls, including those which relate to the review, approval and reconciliation of accounting data and entries. We believe that our disclosure controls and procedures are adequate, given our limited resources.  We hope to address these issues by reviewing and revising our internal accounting policies and procedures in the future.

(B)           Changes in Internal Control Over Financial Reporting

 There has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except that we continue to look for ways to improve our internal controls.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

To the best knowledge of management, there are no material legal proceedings pending against the Company.

Item 1A. Risk factors

Not Applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description
31.1	Certification Pursuant to Section 302*
32.1	Certification Pursuant to 18 U.S.C. Section 1350*

________________

*Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PIEDMONT MINING COMPANY, INC.,
	a North Carolina Corporation
Dated:  May 16, 2011	/s/ Robert M. Shields, Jr.
	By:  Robert M. Shields, Jr. Its:  Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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