Income Taxes

3 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8.         provision for income taxes

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes.  Deferred taxes are provided in the financial statements under ASC Topic 740 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years. Minimal exploration stage deferred tax assets arising as a result of net operating loss carry forwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.  The Company adopted the provisions of ASC Topic 740 Accounting for Uncertainty in Income Taxes, on January 23, 2007 (inception date).  As a result of the implementation of ASC 740, the Company recognized no increase in the liability for unrecognized tax benefits.

Operating loss carry-forwards generated during the period of January 23, 2007 (date of inception), through September 30, 2012, of approximately $4,323,166, will begin to expire in 2027.  Accordingly, deferred tax assets of approximately $1,833,965 related to net operating loss carry-forwards, and $33,736 related to stock-based compensation were offset by the valuation allowance in the same amount.  For the nine months ended September 30, 2012 and 2011, the allowance increased by approximately $220,200 and $875,000, respectively.

The Company has no tax positions at September 30, 2012, or December 31, 2011, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accruals for interest and penalties since inception.

The statute of limitation is three years for Federal tax returns and four years for California state returns.