8. Income Taxes

12 Months Ended

Dec. 31, 2014

Notes

8. Income Taxes

8.   Income Taxes

The Company did not recognize a tax provision or benefit for the years ended December 31, 2014 and 2013.

At December 31, 2014 and 2013, the Company had deferred tax assets which were fully reserved by valuation allowances due to the likelihood of expiration of these deferred tax benefits prior to the Company generating future taxable income sufficient to utilize the deferred tax benefits to reduce tax expense from those future periods.  The deferred tax assets were calculated based on an expected blended future tax rate of 38% for federal and Idaho state purposes.  Following are the components of such assets and allowances at December 31, 2014 and 2013:

	2014	2013
Deferred tax assets arising from:
Net operating loss carryforwards	$         1,754,000	$       1,651,000
Non-deductible share-based compensation	163,000	163,000
Exploration costs	169,000	190,000
Total deferred tax assets	2,086,000	2,004,000
Less valuation allowance	(2,086,000)	(2,004,000)
Net deferred tax asset	$                       -	$                       -

As of December 31, 2014 and 2013, the Company has approximately $4.6 million and $4.3 million, respectively, of federal and state net operating loss carryforwards that expire in 2028 through 2034.

The income tax benefit shown in the financial statements for the year ended December 31, 2014 and 2013, differs from the federal statutory rate as follows:

	2014		2013
(Provision) benefit at statutory rates	$     147,000	35%	$       47,000	35 %
Change in fair value of derivative liabilities	-	-	178,000	131%
State taxes	11,000	2.6%	20,000	14%
Prior year change in estimate	(76,000)	-19.6%	(40,000)	-29%
Increase in valuation allowance	(82,000)	-18%	(205,000)	-151%
Total	$                 0		$                 0

The Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns and found no positions that would require a liability for unrecognized income tax benefits to be recognized.  The Company is subject to possible tax examinations for the years 2012 through 2014.  The Company will deduct interest and penalties as interest expense on the financial statements.