Piedmont Mining 10-Q 2009 Q3 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 September  30, 2009

 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 ¨

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                                 No 

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-3 of the Exchange Act.  (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	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 ¨                      No x

As of November  12, 2009 there were 70,123,643 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	1
Consolidated Statements of Loss	2
Consolidated Statements of Cash Flows	3
Notes to Consolidated Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation	11
Item 3. Quantitative and Qualitative Disclosures About Market Risk	16
Item 4T. Controls and Procedures	16
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	17
Item 1A. Risk Factors.	17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3. Defaults Upon Senior Securities	17
Item 4. Submission of Matters to a Vote of Security Holders	17
Item 5. Other Information	17
Item 6. Exhibits	17
Signature Page	19

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PIEDMONT MINING COMPANY, INC. (An Exploration Stage Company) CONSOLIDATED BALANCE SHEETS
	September 30,		December 31,
	2009 (unaudited)		2008 (audited)
ASSETS	$		$
CURRENT ASSETS
Cash		1,812		582
Prepaid expenses and other		2,366		32,431
Accounts receivable		1,778		-
		5,956		33,013
MINERAL PROPERTIES (Note 4)		107,500		122,000
RECLAMATION BONDS (Note 4)		27,542		29,339
INTEREST IN OIL LEASES (Note 3)		2		-
EQUIPMENT (Note 5)		-		65
Total Assets		141,000		184,417
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) CURRENT LIABILITIES
Accounts payable		428,248		401,438
Due to related parties (Note 6)		484,844		253,929
Total current liabilities		913,092		655,367
STOCKHOLDERS’ EQUITY (DEFICIT)
Capital Stock (Note 7)
Authorized:
50,000,000 Preferred stock $1.00 par value
200,000,000 Common stock no par value
Common stock issued and outstanding:
70,123,643  shares (2008 – 68,615,310)		16,550,144		16,485,145
Additional paid-in capital		872,643		848,659
Deficit accumulated prior to the exploration stage		(12,564,287)		(12,564,287	)
Deficit accumulated during exploration stage		(5,630,592)		(5,240,467	)
Total stockholders’ equity (deficit)		(772,092)		(470,950)
Total liabilities and stockholders’ equity (deficit)		141,000		184,417
The accompanying notes are an integral part of these financial statements.

1

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF LOSS

(unaudited)

	Three months Ended September 30, 2009			Three months Ended September 30, 2008			Nine months Ended September 30, 2009			Nine months Ended September 30, 2008			For the Period from January 1, 2002 (Date of Inception of Exploration Stage) to September 30, 2009
	$			$			$			$			$
REVENUE
Oil revenue (Note 3)		3,233			-			3,233			-			3,233
EXPENSES
Depreciation		-			216			65			648			146,383
Exploration, geological and geophysical costs		56,488			36,626			86,133			433,069			2,338,499
Finance fees		-			100,000			-			100,000			191,200
General and administrative		14,718			54,664			87,179			181,847			896,730
Impairment of mineral  properties (Note 4)		25,000			205,500			25,000			205,500			230,500
Management fees		49,500			49,500			149,984			235,617			972,872
Professional fees		9,626			43,330			64,698			149,265			841,976
		155,332			489,836			413,059			1,305,946			5,618,160
LOSS BEFORE OTHER ITEMS		(152,099	)		(489,836	)		(409,826	)		(1,305,946	)		(5,614,927	)
INTEREST AND OTHER INCOME					-			19,700			3,198			30,925
LOSS ON OTHER NON-OPERATING ACTIVITIES		-			-			-			-			(46,590	)
NET LOSS FOR THE PERIOD		(152,099	)		(489,836	)		(390,126)			(1,302,748	)		(5,630,592	)
BASIC AND DILUTED LOSS  PER SHARE		(0.002	)		(0.007	)		(0.006	)		(0.020	)
WEIGHTED AVERAGE COMMONSHARES OUTSTANDING,   BASIC AND DILUTED		69,617,302			67,920,382			68,952,978			65,484,769

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

2

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended September 30,						For the Period from January 1, 2002 (Date of Inception of Exploration Stage) to September 30,
	2009			2008			2009
	$			$			$
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		(390,126	)		(1,302,748	)	(5,640,592	)
Adjustments to reconcile net loss to net cash from operating activities:
Stock issued as finance fees		-			100,000		100,000
Warrants issued as finance fees		-			-		92,100
Mineral property impairments		25,000			205,500		230,500
Stock based compensation		23,984			110,017		409,468
Depreciation		65			648		146,383
Loss on other non-operating activities		-			-		(21,000	)
Changes in operating assets and liabilities:
Accounts receivable		(1,778)			-		(1,778)
Prepaid expenses and other		30,065			(47,247)		583
Due to related parties		230,911			118,113		387,827
Accounts payable		43,812			60,095		498,801
NET CASH FLOWS USED IN OPERATING ACTIVITIES		(38,067	)		(755,622	)	(3,797,708	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares for cash, net of issuance costs		40,000			650,450		3,709,174
Convertible notes		-			-		291,145
NET CASH FLOWS FROM FINANCING ACTIVITIES		40,000			650,450		4,000,319
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-					(5,579	)
Proceeds from non-operating activities		-			-		97,125
Reclamation bonds		1,797			(29,339)		(27,542)
Mineral property costs		(2,500)			(30,000	)	(265,500	)
NET CASH FLOWS USED IN INVESTING ACTIVITIES		(703)			(59,339	)	(201,496	)
INCREASE (DECREASE) IN CASH		1,230			(164,511)		1,115
CASH, BEGINNING		582			165,877		697
CASH, ENDING		1,812			1,366		1,812
SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES (Note 8)

The accompanying notes are an integral part of these financial statements

3

PIEDMONT MINING COMPANY, INC. (An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 1:   NATURE OF OPERATIONS

Piedmont Mining Company, Inc. (the “Company”) was formed in 1983 under the laws of the State of North Carolina, USA, and is currently in the exploration stage. The Company is primarily involved in the acquisition and exploration of mineral properties. Under Statement of Financial Accounting Standards No. 7 (SFAS) Accounting and Reporting by Development Stage Enterprises, the Company re-established itself as an exploration stage company in 2002 and began reporting under exploration stage guidelines.

The Company’s focus for the foreseeable future will be on the exploration of its properties.  Since April 2005, the Company has entered into exploration agreements for the purpose of exploring for economic deposits of gold and silver in the State of Nevada.  

Going Concern

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America with the on-going assumption 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 significant net revenues or cash flow from its exploration activities.  The Company has a history of losses and has a working capital deficit of $917,134 and an accumulated deficit of $18,178,879 at September 30, 2009.  The Company is dependent on raising further capital to fund ongoing losses and expenditures for its exploration programs. In the current market conditions there is uncertainty that the necessary funding will be obtained as needed, raising substantial doubt as to the ability of the Company to continue operating 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 by way of private placements of its securities, cash flow from interests in producing oil wells and advances from management.  Management believes continued  efforts to sell stock and warrants as well as 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.  The global financial situation in 2008 and 2009 and the ensuing downturn in the economy and in the mineral exploration industry have severely restricted the ability of junior resource companies to raise capital. If the Company is unsuccessful in raising adequate financing, exploration activity will be postponed until market conditions improve.

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 may 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, 2008, included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2009. 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 nine months ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.

Subsequent Events

We evaluated events occurring between the end of our fiscal quarter, September 30, 2009 and November 13, 2009, when the financial statements were issued.

4

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 2:   RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

In April 2009, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. This also includes guidance on identifying circumstances that indicate a transaction is not orderly. This requires the disclosure of the inputs and valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques and related inputs, if any, during the period. The adoption of this statement did not have a material impact on the Company’s results of operations and financial position.

In June 2009, the FASB issued guidance on Subsequent Events. This requires companies to recognize in the financial statements the effects of subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. An entity shall disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued.  Companies are not permitted to recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are issued. Some non recognized subsequent events must be disclosed to keep the financial statements from being misleading.  For such events a company must disclose the nature of the event, an estimate of its financial effect, or a statement that such an estimate cannot be made. This Statement applies prospectively for interim or annual financial periods ending after June 15, 2009. The adoption of this guidance did not have a material impact on the Company’s results of operations and financial position.

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162 (“SFAS 168”).  Upon its adoption, the FASB Accounting Standards Codification (the “Codification”) will become the source of authoritative GAAP recognized by the FASB to be applied to nongovernment entities.  On the effective date of SFAS 168, the Codification will supersede all then-existing non-SEC accounting and reporting standards.  Following SFAS 168, the FASB will not issue new accounting standards in the form of FASB Statements, FASB Staff Positions, or Emerging Issues Task Force abstracts.  SFAS 168 will also modify the existing hierarchy of GAAP to include only two levels – authoritative and non-authoritative.  SFAS 168 will be effective for financial statements issued for interim and annual periods ending after September 15, 2009, and early adoption is not permitted.  The adoption of the Codification did not have a material impact on financial position, results of operations or cash flows.

Recent Accounting Guidance Not Yet Adopted

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for the Company beginning January 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. We believe adoption of this new guidance will not have a material impact on our financial statements.

Certain other recent accounting pronouncements have not been disclosed as they are not applicable to the Company.

5

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 3:  INTEREST IN OIL LEASES

The Company has been 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.  Cash flow from oil production commenced during the third quarter of 2009.

Oil revenues are recorded using the sales method whereby the company recognizes oil revenue based on the amount of oil sold to purchasers when title passes, the amount is determinable and collection is reasonably assured. Actual sales are based on sales, net of the associated volume charges for processing fees and for costs associated with delivery, transportation, marketing, and royalties in accordance with industry standards.

NOTE 4:   MINERAL PROPERTIES

The Company has entered into various property agreements. A summary of capitalized costs is as follows:

	Balance as at December 31, 2008		Transactions during the period			Balance as at September 30, 2009
	$		$			$
Argentite Gold				2,500			2,500
Bullion Mountain		27,000		8,000			35,000
Dutch Flat		35,000		-			35,000
Pasco Canyon		10,000		-			10,000
PPM Gold		25,000		-			25,000
Trinity Silver		10,000		(10,000	)		-
Willow Creek		15,000		(15,000	)		-
		122,000		(14,500	)		107,500
Reclamation Bonds:
PPM Gold		11,566		-			11,566
Willow Creek		17,773		(1,797	)		15,976
		29,339		(1,797	)		27,542

Argentite Gold Project

On March 10, 2009, upon paying $2,500, the Company signed a Letter of Intent to enter into an Exploration Agreement with Option to form Joint Venture on the Argentite gold property in western Nevada once the gold price exceeds $1,000 per ounce for more than 25 consecutive business days, after 90 days from the date of signing the Letter of Intent or after further negotiations.  On signing the formal agreement, the Company would pay $8,000 and then undertake a work commitment of $750,000 over a five year period to earn a 51% interest in the property and the project, or up to a 70% interest upon completion of a bankable feasibility study.  In addition, the Company would make annual payments of $10,000 by the first anniversary of the agreement, $15,000 on the second anniversary, $20,000 by the third anniversary and $25,000 by the fourth anniversary, all of which would be creditable against the work commitment. The Option and Earn-In Agreement has not yet been signed pending receipt of adequate funding.

During the nine months ended September 30, 2009 the Company terminated the option agreement on the Trinity Silver project and has accordingly written off costs of $10,000.

6

PIEDMONT MINING COMPANY, INC. (An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 5:  EQUIPMENT

	September 30,2009			December 31, 2008
Computer equipment	$	5,579		$	5,579
Less: accumulated depreciation		(5,579	)		(5,514	)
	$	0		$	65

NOTE 6:  DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

The Board of Directors has authorized a monthly management fee of $14,000 to the Company’s President and CEO. The unpaid portion of the monthly management fees at September 30, 2009 and December 31, 2008 was $273,250 and $147,250, respectively.  Unreimbursed administrative expenses incurred by the President and CEO at September 30, 2009 and December 31, 2008 were $44,325 and $19,066, respectively. The Company reimburses the President for office rent, which totaled $14,400  for the nine months ended September 30, 2009 and 2008

The unpaid portion of exploration costs incurred to the Company’s Vice-President at September 30, 2009 and December 31, 2008 were $23,767 and $28,270, respectively, which includes his compensation of $26,140 and $21,880, respectively, for services relating to the various exploration projects and research and development.

The directors receive a fee of $200 per meeting for participating in Board meetings and Compensation and Audit Committee meetings. The Chairmen of these Committeesreceive $300 per meeting. The unpaid portion of these fees at September 30, 2009 and December 31, 2008 was $1,400.

From time to time, the Company’s officers and directors advance monies to the Company. These loans bear interest at 5% per annum. These loans are unsecured and have no fixed repayment terms. The unpaid balances including interest related to these advances at September 30, 2009 and December 31, 2008 were $132,868 and $17,724, respectively.

No stock options were granted to its officers or directors by the Company for the nine months ended September 30, 2009.

All related party transactions involving the 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 reflecting arms length consideration payable for similar services or transfers.  (Other related party transactions are disclosed in Note 7.)

NOTE 7:  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.

7

PIEDMONT MINING COMPANY, INC. (An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 7:  CAPITAL STOCK (continued)

Common Share Transactions

During the nine months ended September 30, 2009, the Company completed the following equity transactions:

In January, 2009, the Company completed a private placement offering of 125,000 Units, consisting of one share of Common Stock and one Common Stock Purchase Warrant at a price of $0.04 per Unit for proceeds of $5,000.  The Warrants are exercisable for a period of two years and entitle the holder to purchase one share of Common Stock for $0.10 per Share.

In March, 2009, the Company completed a private placement offering of 100,000 Units, consisting of one share of Common Stock and one Common Stock Purchase Warrant at a price of $0.05 per Unit for proceeds of $5,000.  The Warrants are exercisable for a period of two years and entitle the holder to purchase one share of Common Stock for $0.15 per Share.

In March, 2009, the Company completed a private placement offering of 200,000 Units, consisting of one share of Common Stock and one Common Stock Purchase Warrant at a price of $0.05 per Unit for proceeds of $10,000.  The Warrants are exercisable for a period of two years and entitle the holder to purchase one share of Common Stock for $0.10 per Share

In March, 2009, the Company issued 500,000 shares of Common Stock with a fair value of $0.05 per share or $25,000, pursuant to a letter agreement, as partial satisfaction of outstanding debt.

In May, 2009, the Company completed a private placement offering of 500,000 Units, consisting of one share of Common Stock and one Common Stock Purchase Warrant at a price of $0.03 per Unit for proceeds of $15,000.  The Warrants are exercisable for a period of three years and entitle the holder to purchase one share of Common Stock for $0.05 per Share.

In July, 2009, the Company completed a private placement offering of 83,333 Units, consisting of one share of Common Stock and one Common Stock Purchase Warrant at a price of $0.06 per Unit for proceeds of $5,000.  The Warrants are exercisable for a period of two years and entitle the holder to purchase one share of Common Stock for $0.10 per Share.

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 case-by-case basis.

Total compensation expense for the nine months ended September 30, 2009 was $23,984, which corresponds to the vesting schedule of two to three years.  As of September 30, 2009, the total compensation expense related to non-vested awards to be recognized in future periods is $nil.  . Below is a summary of the stock option activity.

8

PIEDMONT MINING COMPANY, INC. (An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 7:                      CAPITAL STOCK (continued)

			Weighted
	Number of		Average
	Options		Exercise Price
Total Options			$
Outstanding, December 31, 2007		5,975,000	0.235
Cancelled March 4, 2008		(400,000)	0.200
Granted April 9, 2008		150,000	0.280
Outstanding, December 31, 2008		5,725,000	0.239
Expired		-	-
Granted		-	-
Outstanding, September 30, 2009		5,725,000	0.239
Non-vested Options			$
Nonvested options, December 31, 2007		1,150,000	0.11
Granted April 9, 2008		150,000	0.12
Vested		(1,075,000)	0.11
Nonvested options December 31, 2008		225,000	0.11
Vested		(225,000)	0.11
Nonvested options September 30, 2009		0

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

Options Outstanding at September 30, 2009				Options Exercisable at September 30, 2009
		Weighted			Weighted
		Average			Average
		Remaining	Weighted		Remaining	Weighted
Range of	Number	Contractual	Average	Number	Contractual	Average
Exercise Prices	of Shares	Life (in years)	Exercise Price	of Shares	Life (in years)	Exercise Price
$ 0.20 – 0.28	5,725,000	1.487	$      0.239	5,725,000	1.487	$     0.239

Options Outstanding at December 31, 2008				Options Exercisable at December 31, 2008
		Weighted			Weighted
		Average			Average
Range of		Remaining	Weighted		Remaining	Weighted
Exercise	Number	Contractual	Average	Number	Contractual	Average
Prices	Of Shares	Life (in years)	Exercise Price	of Shares	Life (in years)	Exercise Price
$ 0.20 – 0.28	5,725,000	2.23	$      0.239	5,500,000	2.135	$     0.238

The outstanding and exercisable stock options had no intrinsic value at September 30, 2009.

9

PIEDMONT MINING COMPANY, INC. (An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(unaudited)

NOTE 7:  CAPITAL STOCK (continued)

Common Stock Purchase Warrants

Total outstanding warrants at September 30, 2009 were 8,574,868.  The exercise prices on all warrants range from $0.05 to $0.60 per share. The warrants are exercisable immediately upon issuance and the expiration dates range between two years and five years after the date of issuance.

During the nine months ended September 30, 2009, the Company issued warrants relating to unit private placements granting holders the right to purchase 1,008,333 shares of common stock.  The exercise prices on these warrants range from $0.05 to $0.15 per share. The warrants were exercisable immediately upon issuance and the expiration dates are two and three years after issuance.  The Company estimated the total fair market value of these warrants to be $4,600 at the date of grant, using the Black Scholes pricing model using an expected life of one year, a risk-free interest rate of2% and an expected volatility of 109%.  The fair value of the warrants has been included in capital stock.

The warrants exercisable at September 30, 2009 had no intrinsic value.

A summary of the Company’s stock purchase warrants as of September 30, 2009 is presented below:

	Number of Warrants	Weighted average exercise price	Weighted average remaining life (years)
		$
Balance, December 31, 2008	10,479,035	0.320	1.09
Exercised	-
Expired	(2,912,500)
Issued	1,008,333	0.060	2.41
Balance, September 30, 2009	8,574,868	0.329	0.55

NOTE 8:   SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING ACTIVITIES

In March, 2009, the Company issued 500,000 shares of Common Stock with a fair value of $0.05 per share or $25,000, pursuant to a letter agreement as partial satisfaction of outstanding debt.

	Nine months  ended September 30, 2009	Nine months  ended September 30, 2008
	$	$
Interest paid	-	-
Income taxes paid	-	-

NOTE 9:  SUBSEQUENT EVENTS

In October 2009, the Option and Earn-In Agreement on the Willow Creek property was terminated.  The Company was not able to fulfill its exploration expenditure requirements in a timely manner.  As a result, the Company has written of costs of $15,000 at September 30, 2009.

10

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, 2008  that was filed with the Securities and Exchange Commission on March 31, 2009.

Overview of Business

We are a North Carolina corporation formed in 1983. From our inception until 1992, we were engaged in the exploration for, and production of, gold and other precious metals and the evaluation of gold properties in North Carolina and South Carolina. From 1983 we were engaged in exploration and from early 1985 until May 1992, we were also engaged in the mining and production of gold and silver at our Haile Mine Property near Kershaw, South Carolina. In May 1992, we entered into a joint venture at our Haile Mine Property with Amax Gold, Inc. Our operations ceased at the Haile Mine Property in 1993. We did not again become engaged in exploration activities until 2004, when we relocated our principal place of business to Reno, Nevada. Since October 2003, we have been an exploration stage company engaged in the acquisition and exploration of mineral properties.

We currently have agreements on six different exploration properties in the state of Nevada. Subject to the availability of adequate funding, we plan to conduct exploration for gold and silver at each of these properties and at other properties we may enter into agreements on to assess whether they possess economic deposits of gold and/or silver, which can be recovered at a profit. We do not intend to build an exploration staff, butrather to work with competent exploration groups who can manage the exploration activities with our funding, although in some cases we may conduct exploration on our own using contractors. We donot know whether a commercially viable ore body will be located on any of our mineral properties. Our current exploration plans are limited to research and exploration in the state of Nevada.

Recent Events

In October 2009 the Option and Earn-In Agreement on the Willow Creek property (the “Willow Creek Agreement”) was terminated as a result of our inability to fulfill our exploration expenditure requirements in a timely manner due to lack of capital.

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Although we have obtained a source of limited cash flow from our interest in two oil wells in Tennessee, as further discussed in this Form 10-Q, 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 ongoing operations by way of private placements of its securities, cash flow from interests in producing oil wells and advances from our management.  Management believes continued  efforts to sell stock and warrants as well as advances from management will contribute toward funding our  activities until appropriate levels of funding can be arranged and/or revenue can be earned from the properties either through production or sale.  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, 2008 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 $17,804,754 and a working capital deficit of $622,354 at December 31, 2008. 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.

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, the Company received its first revenues from interests in two oil wells for a total of $3,233.

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

· locate one or more economic mineral deposits which could then be put into production, from which we would then be able to extract gold or silver at a profit; or

· enter into a joint venture arrangement on one or more of our leased properties; or

There is no guarantee 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 the ore.

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Expenses for the Nine Month Period ending September 30, 2009 vs. September 30, 2008

Expenses for the Three Month Period ending September30, 2009 vs. September 30, 2008

Exploration, geological and geophysical costs increased by $19,862, or 54.23% to $56,488 for the three months ended September 30, 2009 as compared to $36,626 for the three months ended September 30, 2008.  The principal reason for this increase was payment of claim fees on various properties. 

Exploration, geological and geophysical costs decreased by $346,936, or (80.11%) to $86,133 for the nine months ended September 30, 2009 as compared to $433,069 for the nine months ended September 30, 2008.  The principal reason for this decrease was due to a decrease in exploration activity due to a lack of funding. 

Management fees showed no change for the three months ended September 30, 2009 as compared to the three months ended September 30, 2008.  

Management fees decreased by $85,633, or (36.34%), to $149,984 for the nine months ended September 30, 2009 as compared to $235,617 for the nine months ended September 30, 2008.  The principal reason for this change for the nine month period was due to a decrease of $89,633 in recording the expense of vested options and an increase of $4,000 in the monthly fees paid to the president.

For the three months ended September 30, 2009, professional fees decreased $33,704, or (77.782%) to $9,626 as compared to $43,330 for the three months ended September 30, 2008.  This change for the three month period is due to a decrease in legal fees of $26,409 as the Company had not finalized any new agreements for the quarter and a decrease in accounting fees of $7,295 due to increased efficiencies .

For the nine months ended September 30, 2009, professional fees decreased $84,567, or (56.66%) to $64,698 as compared to $149,265 for the nine months ended September 30, 2008.  This change for the nine month period is due to a decrease in legal fees of $75,365 as the Company had not finalized any new agreements for the quarter and a decrease in accounting fees of $9,202 due to increased efficiencies.

Depreciation expense decreased by $216, or (100%), to $0 for the three months ended September 30, 2009 as compared to $216 for the three months ended September 30, 2008.  The principal reason for this change is attributable to equipment becoming fully depreciated.

Depreciation expense decreased by $583, or (89.97%), to $65 for the nine months ended September 30, 2009 as compared to $648 for the nine months ended September 30, 2008.  The principal reason for this change is attributable to equipment becoming fully depreciated

Liquidity and Financial Condition

Cash and Working Capital

We had an accumulated deficit of ($17,804,754) from our inception in 1983 to December 31, 2008, and an accumulated deficit of ($18,179,879) at September 30, 2009.  We had a working capital deficit of $917,134 at September 30, 2009.  We have no contingencies or long-term obligations except for our work commitments described under our seven (7) property agreements on our leased properties. All of these agreements can be terminated by us upon either 30 or 60 days notice.

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We had a cash balance of $582 on December 31, 2008 and a cash balance of $1,812 on September 30, 2009.  For the nine months period ending September 30, 2009, we had net cash inflows of $1,230.

The cash flows used in operations for the nine month period ended September 30, 2009 were $38,067 compared with $755,624 for the same period in 2008.  Cash flows used in operations for the nine month period ended September 30, 2009 consisted primarily of a net loss of $390,126 including oil revenues of $3,233, stock based compensation of  $23,984, mineral property impairment of $25,000, with changes in working capital assets and liabilities consisting of an increase in accounts receivable of $1,778, a net decrease in prepaid expenses of $30,065, an  increase in accounts payable and accrued liabilities of $43,812 and an increase of $230,914 to accrued expenses for amounts unpaid to related parties..

Net cash flows provided by equity financing activities were $40,000 versus $650,450 during the same period in 2008.  

Internal and External Sources of Liquidity

During the forthcoming 12 month period, we plan to fund our operations through issuances of Common Stock or Common Stock with warrants, by advances from management and from cash flow provided by interests in oil and gas wells.  In the event, we are unable to raise additional capital, we may not be able to meet our obligations and may be required to curtail or terminate some of our planned exploration programs

Contractual Obligations

We have no commitments for capital expenditures.

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

At September 30, 2009 we are committed to making certain exploration work expenditures, lease and option payments, and claims maintenance payments on properties as follows.

Bullion Mountain Gold Project:

· Required work expenditure by November 11, 2006:  $20,000 of which $30,470 has already been expended.  In September, 2007, this agreement was amended and the time for completing the remaining work obligation was extended indefinitely.

· Claims maintenance fees have been paid through August 31, 2010.  

· Annual payments:  $15,000 has been accrued, of which $3,000 has been paid. An additional $15,000 will be due on November 1, 2009.

Trinity Silver Project:

· The Trinity Silver Project was terminated during the third quarter of 2009.

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Pasco Canyon Gold Project:

· Required work expenditure:  $60,971 has already been completed. Further work postponed pending receipt of drill permit from U.S. Forest Service, and the receipt of additional funds.

· Claims maintenance fees have been paid through August 31, 2010.

· Annual payments; $0.

Dutch Flat Gold Project:

· Required work expenditure:  $500,000 by March 31, 2009, of which $560,677 was expended as of September 30, 2009.  Further work will depend upon the timing and receipt of additional funds.

· Claims maintenance fees have been paid through August 31, 2010.

· Annual payments; $0.

PPM Gold Project:

· Required work expenditure to April 2008: $175,000, of which $151,127 has been expended; and to April 2009; $200,000.  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 and are in discussions to amend the terms of the agreement.

· Claims maintenance fees have been paid through August 31, 2010.

· Annual payments; $0.

Willow Creek Gold Project:

· The Willow Creek Gold Project was terminated during the fourth quarter of 2009.

Morgan Pass Gold Project:

· On May 20, 2008, a Letter of Intent was signed on the Morgan Pass Project.  The option and earn in agreement will not be prepared and signed until the property is released into ‘multiple use’ classification by the Bureau of Land Management. Funds of $17,666 have been expended to date.   Claims maintenance fees have been paid through August 31, 2010.

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 Argentite Gold Project:

· On March 10, 2009, upon paying $2,500, the Company signed a Letter of Intent to enter into an Exploration Agreement with Option to form Joint Venture on the Argentite gold property in western Nevada once the gold price exceeds $1,000 per ounce for more than 25 consecutive business days or after 90 days from the date of signing the Letter of Intent.  On signing the formal agreement, the Company will pay $8,000 and will then undertake a work commitment of $750,000 over a five year period to earn a 51% interest in the property and the project, or up to a 70% interest upon completion of a bankable feasibility study.  In addition, the Company would make annual payments of $10,000 by the first anniversary of the agreement, $15,000 on the second anniversary, $20,000 by the third anniversary and $25,000 by the fourth anniversary, all of which would be creditable against the work commitment. The Option and Earn-in Agreement has not yet been prepared or signed, pending the receipt of adequate funding.  Claims maintenance fees have been paid through August 31, 2010.

All of these property agreements can be terminated on 30 to 60 days advance notice

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 4T. 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.

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon and as of the date of that evaluation, our principal executive officer and financial officers concluded that there were material weaknesses in our internal controls, including those which relate to the review, approval and reconciliation of accounting data and entries. Accordingly, we believe that our disclosure controls and procedures were ineffective as of the end of the period covered by this quarterly report.  We are addressing these issues by reviewing and revising our internal accounting policies and procedures.

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(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

In July, 2009, the Company completed a private placement offering of 83,333 Units, consisting of one share of Common Stock and one Common Stock Purchase Warrant at a price of $0.06 per Unit for proceeds of $5,000.  The Warrants are exercisable for a period of two years and entitle the holder to purchase one share of Common Stock for $0.10 per Share.

The issuances of Common Stock was made by us in reliance upon the exemptions from registration provided under Section 4(2) and 4(6) of the Securities Act and Rule 506 of Regulation D, promulgated by the SEC under federal securities laws and comparable exemptions for sales to “accredited” investors under state securities laws.  

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission Of Matters To A Vote Of Security Holders

None.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description
3.1.1	Articles of Incorporation of Piedmont Mining Company, Inc., filed July 25, 1983(1)
3.1.2	Amendment to Articles of Incorporation, filed August 1, 1983(1)
3.1.3	Amendment to Articles of Incorporation, filed June 11, 1984(1)
3.1.4	Amendment to Articles of Incorporation, filed June 24, 1984(1)
3.1.5	Amendment to Articles of Incorporation, filed July 23, 1987(1)
3.1.6	Amendment to Articles of Incorporation, filed September 2, 1987(1)
3.1.7	Amendment to Articles of Incorporation, filed June 7, 1988(1)
3.1.8	Amendment to Articles of Incorporation, filed June 15, 1994(1)
3.1.9	Amended and Restated Articles of Incorporation, filed December 17, 2007(2)
3.2.1	Bylaws of Piedmont Mining Company, Inc.(1)
3.2.2	Amendment to Bylaws adopted June 25, 1984(1)
3.2.3	Amendment to Bylaws adopted in 1988(1)
3.2.4	Amendment to Bylaws adopted May 17, 1988(1)
3.2.5	Amendment to Bylaws adopted May 17, 1988(1)
3.2.6	Amendment to Bylaws adopted April 7, 1989(1)
3.2.7	Amendment to Bylaws adopted March 14, 1990(1)
3.2.8	Amendment to Bylaws adopted September 26, 1990(1)
31.1	Certification Pursuant to Section 302*
32.1	Certification Pursuant to 18 U.S.C. Section 1350*

________________

*Filed herewith

(1)	Incorporated by reference from Registration Statement on Form SB-2 filed with the SEC on July 24, 2002.
(2)	Incorporated by reference from Form 8-K filed with the SEC on June 8, 2005.

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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: November 13, 2009	/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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