NOTE 6: NOTES RECEIVABLE

3 Months Ended

Jun. 30, 2012

Receivables, Policy [Policy Text Block]

NOTE 6: NOTES RECEIVABLE

Mexican Concessions

On August 11, 2008, the Company sold 100% of the common stock of its wholly owned subsidiary in Mexico, Shoshone Mexico, S.A. de C.V, to Xtierra Resources, Ltd (“Xtierra”).  The Company’s interest in the Bilbao concessions in Zacatecas, Mexico was included in this sale.   In exchange for its interest in the Bilbao concessions the Company received net proceeds of $2,497,990 and a non-interest bearing note receivable for $2,500,000.

The note does not bear interest and a discounted payment of $450,000 was made in July 2009.   The remaining balance of $2,000,000 is to be paid in four consecutive equal annual installments to begin at the time of the commencement of construction of any mine developed on the Bilbao concessions but in any event will be due and payable no later than August 11, 2019.

Since the note does not bear interest, the Company imputed interest at a rate of 5%.  Accordingly the Company recorded a note discount of $634,637.  During the nine-month period ended June 30, 2012, $60,231 of interest income was realized through the amortization of this note discount.

The balance on this note receivable (net of discount) was $1,675,147 at June 30, 2012.