0001052918-16-001215.txt : 20160815 0001052918-16-001215.hdr.sgml : 20160815 20160815142223 ACCESSION NUMBER: 0001052918-16-001215 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 47 CONFORMED PERIOD OF REPORT: 20160630 FILED AS OF DATE: 20160815 DATE AS OF CHANGE: 20160815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THUNDER MOUNTAIN GOLD INC CENTRAL INDEX KEY: 0000711034 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 911031075 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08429 FILM NUMBER: 161831798 BUSINESS ADDRESS: STREET 1: 5248 W. CHINDEN CITY: BOISE STATE: ID ZIP: 83714 BUSINESS PHONE: 208-658-1037 MAIL ADDRESS: STREET 1: 5248 W. CHINDEN CITY: BOISE STATE: ID ZIP: 83714 10-Q 1 thmg10qaug1016.htm THUNDER MOUNTAIN GOLD INC FORM 10-Q Thunder Mountain Gold, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


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


For the quarterly period ended June 30, 2016

OR


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


For the transition period from                                       to                                          


Commission File Number:  001-08429

  


[thmg10qaug1016002.gif]


THUNDER MOUNTAIN GOLD, INC.

(Exact name of Registrant as specified in its charter)


Nevada

 

91-1031015

(State or other jurisdiction of incorporation  or  organization)

 

(IRS identification No.)

 

 

 

11770 W President Dr. STE F

 

 

Boise,  Idaho

 

83713-8986

(Address of Principal Executive Offices)

 

(Zip Code)

 

(208) 658-1037

 (Registrant’s Telephone Number, including Area Code)


(Former name, former address and former fiscal year, if changed since last report)

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.   x   Yes  ¨  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).  x  Yes ¨  No


Indicate by check mark whether the Registrant is  ¨  a large accelerated filer, ¨  an accelerated file, ¨  a non-accelerated filer, or  x  a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act)


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

 ¨  Yes  x   No


Number of shares of issuer’s common stock outstanding at August 4, 2016:  51,477,549




2




TABLE OF CONTENTS



PART I – FINANCIAL INFORMATION

3

Item 1:  Financial Statements

3

Item 2.  Management's Discussion and Analysis or Plan of Operation

10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

18

Item 4.  Controls and Procedures

18

PART II – OTHER INFORMATION

19

Item 1.  Legal Proceedings.

19

Item 1A. Risk Factors.

19

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

19

Item 3.  Defaults Upon Senior Securities.

19

Item 4.  Mine Safety Disclosures

19

Item 5.  Other Information

19

Item 6.  Exhibits

20

SIGNATURES

21








2





PART I – FINANCIAL INFORMATION


Item 1:  Financial Statements



Thunder Mountain Gold, Inc.

Consolidated Balance Sheets

June 30, 2016 and December 31, 2015

 

 

 

 

 

 

 

June 30,

2016

(Unaudited)

 

December 31,

2015

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$            21,481

 

$          12,143

 

Prepaid expenses and other assets

 

28,338

 

27,556

 

 

Total current assets

 

49,819

 

39,699

 

 

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Investment in Owyhee Gold Trust LLC

 

479,477

 

479,477

 

 

 

Total assets

 

$        529,296

 

$       519,176

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY  (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and other accrued liabilities

 

$         128,267

 

$        178,786

 

Accrued related party liability (Note 4)

 

145,178

 

123,038

 

Accrued interest payable to related parties

 

7,352

 

-

 

Accrued payroll (Note 3)

 

427,000

 

274,000

 

Related party notes payable (Note 4)

 

113,576

 

171,076

 

 

Total current liabilities

 

821,373

 

746,900

Commitments and Contingencies (Note 2)

 

 

 

 

Stockholders' equity (deficit) :

 

 

 

 

 

Preferred stock; $0.0001 par value, 5,000,000

 

 

 

 

 

 

shares authorized; no shares issued or outstanding

 

-

 

-

 

Common stock; $0.001 par value; 200,000,000 shares authorized,

 

 

 

 

 

 

50,867,549 and 44,167,549, respectively shares issued and outstanding

 

50,868

 

44,168

 

Additional paid-in capital

 

4,522,097

 

4,193,797

 

 

Less:  11,700 shares of treasury stock, at cost

 

(24,200)

 

(24,200)

 

Accumulated deficit

 

(4,840,842)

 

(4,441,489)

 

 

Total stockholders' equity (deficit)

 

(292,077)

 

(227,724)

 

 

 

Total liabilities and stockholders' equity (deficit)

 

$        529,296

 

$      519,176





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



3









Thunder Mountain Gold, Inc.

Consolidated Statements of Operations (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2016

 

2015

 

2016

 

2015

Expenses:

 

 

 

 

 

 

 

 

 

Exploration expenses

$

48,315

$

68,372

$

93,820

$

73,035

 

Legal and accounting

 

51,580

 

23,363

 

166,559

 

96,643

 

Management and administrative

 

67,089

 

86,899

 

136,834

 

221,906

 

 

Total expenses

 

166,983

 

178,634

 

397,213

 

391,585

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, related party

 

(3,573)

 

(16,947)

 

(7,352)

 

(41,337)

 

Foreign exchange gain (loss)

 

(204)

 

 

 

5,212

 

 

 

 

Total other income (expense)

 

(3,778)

 

(16,947)

 

(2,140)

 

(41,337)

Net Loss

$

(170,761)

$

(195,581)

$

(399,353)

$

(432,922)

 

 

 

 

 

 

 

 

 

Net Loss per common

 

 

 

 

 

 

 

 

 

 share-basic and diluted

$

0.00

$

0.00

$

(0.01)

$

(0.01)

 

 

 

 

 

 

 

 

 

Weighted average common

 

 

 

 

 

 

 

 

 

shares outstanding-basic and diluted

 

50,867,549

 

44,167,549

 

50,260,956

 

42,786,364

 

 

 

 

 

 

 

 

 





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




4









Thunder Mountain Gold, Inc.

 

 

 

 

Consolidated Statements of Cash Flows (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

2016

 

2015

Cash flows from operating activities:

 

 

 

 

 

Net loss

 

$  (399,353)

 

$  (432,922)

 

Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

used by operating activities:

 

 

 

 

 

 

Options issued for services

 

-

 

60,000

 

 

Amortization of related party notes payable discounts

 

-

 

11,565

 

Change in:

 

 

 

-

 

 

Prepaid expenses and other assets

 

(782)

 

(4,877)

 

 

Accounts payable and other accrued liabilities

 

(50,519)

 

74

 

 

Accrued related party liability

 

22,140

 

29,696

 

 

Accrued interest payable to related parties

 

7,352

 

-

 

 

Accrued payroll

 

153,000

 

118,000

 

 

 

Net cash used by operating activities

 

(268,162)

 

(218,464)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from sale of common stock

 

285,000

 

250,000

 

Payments on related party note payable

 

(7,500)

 

 

 

 

 

Net cash provided by financing activities

 

227,500

 

250,000

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

9,338

 

31,536

Cash and cash equivalents, beginning of period

 

12,143

 

31,992

Cash and cash equivalents, end of period

 

$        21,481

 

$      63,528

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

Stock issued for payments on related parties notes payable

 

$        50,000

 

 



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




5






1.

Summary of Significant Accounting Policies and Business Operations


Business Operations


Thunder Mountain Gold, Inc. (“Thunder Mountain” or “the Company”) was originally incorporated under the laws of the State of Idaho on November 9, 1935, under the name of Montgomery Mines, Inc.  In April 1978, the Montgomery Mines Corporation was obtained by a group of the Thunder Mountain property holders and changed its name to Thunder Mountain Gold, Inc., with the primary goal to further develop their holdings in the Thunder Mountain Mining District, located in Valley County, Idaho. Thunder Mountain Gold, Inc. takes its name from the Thunder Mountain Mining District, where its principal lode mining claims were located. For several years, the Company’s activities were restricted to maintaining its property position and exploration activities. During 2005, the Company sold its holdings in the Thunder Mountain Mining District. During 2007, the Company acquired the South Mountain Mines property in southwest Idaho and initiated exploration activities on that property, which continue today.


Basis of Presentation and Going Concern


The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to the Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. For further information, refer to the financial statements and the footnotes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015.


The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include financing the Company’s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners.


The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.



Investments in Joint Venture


The Company’s accounting policy for joint ventures is as follows:


1.

The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are carried at cost. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.


2.

If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.


3.

In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is typically consolidated with the presentation of non-controlling interest.  In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee.   However, see Note 3 regarding the Company’s accounting for its investment in Owyhee Gold Trust, LLC,




6






Recent Accounting Pronouncements

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.


Net Income (Loss) Per Share


The Company is required to have dual presentation of basic earnings per share (“EPS”) and diluted EPS.  Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including options and warrants to purchase the Company’s common stock.  As of June 30, 2016 and 2015, the remaining potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:


For the period ended June 30,

2016

2015

Stock options

3,990,000

3,990,000

Warrants

5,015,000

5,015,000

    Total possible dilution

9,005,000

9,005,000


2.  

Commitments


On March 21, 2011, the Company signed an exploration agreement with Newmont Mining Corporation (“Newmont”) on the Trout Creek Project that significantly expands the Trout Creek target area. Newmont’s private mineral package added to the Project surrounds the Company’s South Mountain claim group and consists of about 9,565 acres within a thirty-square mile Area of Influence defined in the agreement.  Under the terms of the agreement, the Company is responsible for conducting the exploration program and is obligated to expend a minimum of $150,000 over the ensuing two years, with additional expenditures possible in future years.  


On October 1, 2015, the Company signed an Amendment with Newmont USA Limited that modifies and extends the original Trout Creek Joint Exploration Agreement. The extension allows the Company modified work commitments on the project reducing the annual amount to $150,000 of work obligations by October 31, 2016.


3.

South Mountain Project

On November 8, 2012, the Company, through its wholly-owned subsidiary South Mountain Mines, Inc., (“SMMI”), and Idaho State Gold Company II, LLC (“ISGC II”) formed the Owyhee Gold Trust, LLC, (“OGT”) a limited liability company. The Company’s initial contribution in accordance with the Operating Agreement, was the non-cash contribution of its South Mountain Mine property and related mining claims located in southwestern Idaho in Owyhee County which had a carrying value of $479,477 at the date of contribution, but for purposes of the Operating Agreement, valued at $6.725 Million. As its initial contribution to OGT, ISGC II agreed to fund operations totaling $18 million; or $8 million if the Company exercises its option to participate pro-rata after ISGC II expends $8 million and completes work commitments including a Feasibility Study, and a certain amount of required underground core drilling.  ISGC II was the initial manager of OGT LLC. Upon payment of $1 million, and a work commitment of $2 million in pre-determined qualifying expenditures not later than December 31, 2014, ISGC II was to receive 2,000 units representing a vested 25% ownership. As of December 31, 2014, none of these ownership units had been issued to ISGC II.  Through December 31, 2014, the Company accounted for its investment in the OGT by the cost method.

On January 27, 2015, SMMI became manager of the OGT under the terms of the November 8, 2012 operating agreement, because ISGC II had effectively resigned under the Agreement. This appointment as Manager was further ratified by a Judge`s Court Order on March 1, 2016.  Beginning in January 2015, SMMI paid OGT’s expenses to ensure ongoing operations at the site. For the six-month period ending June 30, 2016 and for the year ended December 31, 2015, the Company incurred expenses of $300,332 and $693,592, respectively relating to OGT operations. The Company has recognized these expenses in these consolidated financial statements because, due to the dispute discussed below, it is not clear as to whether SMMI will be reimbursed by OGT.  At June 30, 2016 and December 31, 2015, accrued payroll for services performed relating to the operation of OGT was $427,000 and $274,000, respectively.  The accrued payroll was earned by three of the Company’s officers whose balances at June 30, 2016 are as follows:  Eric Jones, President and Chief Executive Officer - $170,000, James Collord, Vice President and Chief Operating Officer - $170,000, and Larry Thackery, Chief Financial Officer - $87,000.    None of the compensation has been paid.   



7






SMMI maintains that ISGC II did not earn its ownership units, and resigned under the terms of the Operating Agreement, causing SMMI to become manager. ISGC II did not agree that SMMI became manager of OGT in early 2015. However, that disagreement was corrected on March 1, 2016, when a Judge`s Order stipulated that SMMI was in fact Manager.


In December 2015, the Company received service of a Complaint that had been filed but not served on June 22, 2015, namely Idaho State Gold Co. II, LLC, an Idaho limited liability company; and, Owyhee Gold Territory, LLC, an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation, et al.,.  At December 31, 2015, the status of the lawsuit was pending and management is unable to predict the outcome due to the early stages of the litigation.   The probability of loss is unknown and the financial statements do not include any adjustment related to litigation.    

 

On January 11, 2016, the Company answered the complaint it received in December 2015.   In its response, the Company asserts that:


·

ISGC II failed to make its initial contribution, including earn in requirements described by the OGT agreement;

·

ISGC II failed to provide accounting consistent with generally accepted accounting practices, along with an independent audit required for issuance of ownership units; and

·

Significant damages are payable by ISGC II to the Company.


On February 16, 2016, ISGC II filed a motion for a more definitive statement asserting that the Company’s response was not specific enough.


On March 1, 2016, the Company was awarded a Court Order approving defined stipulations and dismissing of certain portions of a December Complaint.  The Court Order acknowledged and confirmed the Company’s assertions, and stipulated that:


a.

As of March 1, 2016, the Company’s wholly owned subsidiary, SMMI, is the manager of OGT for all lawful purposes and shall have the right to advance the project and the interests of OGT and the South Mountain Mine Project according to the terms of OGT’s November 8, 2012, Operating Agreement and the Parties November 8, 2012, Member Agreement; and

b.

OGT is the owner of the real property described in the Operating Agreement signed by both parties November 8, 2012, and confirmed by certain Quitclaim Deed and filed on October 31, 2013, without any without any claim or encumbrance by Defendants; and

c.

ISGC II acknowledges that a Statement of Authority should be filed with the Idaho Secretary of State that identifies SMMI as Manager of OGT effective the date of this Stipulation; and

d.

Because of conflicts of interest, OGT, and the Company’s subsidiaries THMG and THMR were dismissed from the litigation; and

e.

ISGC II shall not sell or cause to be sold any of the equipment and assets described in the ISGC II financial reports without prior notice and the concurrence of OGT, with SMMI acting as manager of OGT; and

f.

ISGC II’s motion for a more definite statement is withdrawn.


Because of the Court Order above, ISGC II was required to withdraw their original Complaint. ISGC II filed an amended Complaint on March 14, 2016 in which it claims it is entitled to vesting of Units in OGT based solely upon the funds they spent towards the South Mountain mining project, or based upon an equitable claim.   The Company deems their claims erroneous and without merit, and that funds were spent outside of compliance with the Operating Agreement, and without proper controls or accounting. The Company will aggressively and vigorously defend against this lawsuit, and is confident of a positive legal outcome for the Company in Idaho Court.  


At December 31, 2015 and June 30, 2016, because of the uncertainty as to the status of OGT and the share allocation between SMMI and OGT, the Company has continued to account for its investment at cost and has recognized the expenses incurred in 2015 and the first six months of 2016 for the operation of OGT.


4.   Related Party Notes Payable


On December 9, 2014 the Company executed two promissory notes payable to directors, Eric Jones and Jim Collord. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier.



8






The original convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount.


On July 1, 2015, these notes were extended to December 31, 2015.  As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month.  


The extension contained a conversion feature. The note holder can convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015.


During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively.  On the due date of the notes, December 31, 2015, these notes were extended to January 31, 2016.    In connection with this extension, the accrued interest balance of $30,000 was added to the principal balance resulting in a new outstanding principal balance of $171,076.   Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated.


On January 18, 2016, the Company initiated a private offering for an aggregate, 6,700,000 shares of common stock.  In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each from their related notes payables for a total of 1 million shares (see Note 6).  During the six months ended June 30, 2016, the Company paid $7,500 on Mr. Jones’ outstanding note balance.  At June 30, 2016, the notes payable balances were $51,769 and $61,808 for Mr. Jones and Mr. Collord, respectively.  Also at June 30, 2016, accrued interest payable balances were $3,403 and $3,949 for Mr. Jones and Mr. Collord, respectively.    


5.

Related Party transactions


In addition to the related party notes payable discussed in Note 4, the Company has engaged Baird Hanson LLP (“Baird”), a company owned by one of the Company’s directors, to provide legal services in the OGT matter (see Note 3).  Legal expenses of $54,000 and $123,108 have been incurred for these services during the six months ended June 30, 2016 and the year ended December 31, 2015, respectively.   At June 30, 2016 and December 31, 2015, the amounts due to Baird are $145,178 and $123,038, respectively.  


6.

Stockholders’ Equity


The Company’s common stock has a par value of $0.001 with 200,000,000 shares authorized. The Company also has 5,000,000 authorized shares of preferred stock with a par value of $0.0001.


During the year ended December 31, 2015, the Company sold 4,000,000 shares at $0.05 per share for total proceeds of $200,000.   No warrants were issued with the shares.


On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance. The Company sold 5,700,000 shares of common stock at a rate of $0.05 for $285,000.  In addition, Mr. Jones and Mr. Collord exchanged $50,000 of their notes outstanding (see Note 4) into 1,000,000 shares of common stock at the same rate of $0.05 per share.    There were no warrants issued with the shares.


On May 12, 2016 the Company extended the expiration date of five million (5,015,000) outstanding warrants issued during 2014 for an additional 6 months (November 24, 2016).  The Company also reduced the exercise price from $0.15 to $0.10.


7.

Stock Options


The Company has established a Stock Option Incentive Plan (“SIP”) to authorize the granting of stock options up to 10 percent of the total number of issued and outstanding shares of common stock to employees, directors and consultants. Upon exercise of options, shares are issued from the available authorized shares of the Company.



9






Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant. 


On February 6, 2015, the Board approved a grant of one million options to purchase shares of common stock under the SIP to Directors, Executive Officers and other non-employees’ consultants. The granted options have been valued and recorded using the Black Scholes model. The Black Scholes calculation on the 1,000,000 options that were issued was a fair value of $0.06 per option ($60,000 in total). The SIP was approved by shareholder vote during the January 20, 2015 annual shareholder meeting. The options were fully vested upon grant and recognized as compensation expense for the year ended December 31, 2015.    No options were granted during the six months ended June 30, 2016.


The fair value of each option award was estimated on the date of the grant using the assumptions noted in the following table:


Stock price

$           0.06

Exercise price

$           0.06

Expected volatility

230.09%

Expected dividends

-

Expected terms (in years)

5.0

Risk-free rate

1.31%


The following is a summary of the Company’s options issued under the Stock Option Incentive Plan:


 

Shares

Weighted Average Exercise Price

Outstanding at December 31, 2013 and 2014

2,990,000

$             0.20

    Granted in 2015

1,000,000

0.06

Outstanding and exercisable at December 31, 2015 and June 30, 2016

3,990,000

$             0.17


The average remaining contractual term of the options outstanding and exercisable at June 30, 2016 was 1.35 years.  As of June 30, 2016 options outstanding and exercisable had no aggregate intrinsic value.


8.

Subsequent Events

On July 2, 2016 Company has granted 2,775,000 stock options to directors, officers, employees and consultants of the Company and its affiliates to purchase common shares in the capital stock of the Company. The options are exercisable on or before July 20, 2021 at a price of $0.10 per share. As of August 4, 2016, the Company has 4,765,000 outstanding stock options that represent 9.4% of the issued and outstanding shares of common stock.

In July 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.












10






ITEM 2.  Management's Discussion and Analysis or Plan of Operation


The following Management’s Discussion and Analysis of Financial Condition and Results of Operation (“MD&A”) is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes (“Notes”) thereto.  The following statements may be forward-looking in nature and actual results may differ materially.


Plan of Operation:


FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include the following: inability to locate property with mineralization, lack of financing for exploration efforts, competition to acquire mining properties; risks inherent in the mining industry, and risk factors that are listed in the Company's reports and registration statements filed with the Securities and Exchange Commission.


The Company’s financial position remained unchanged during the second quarter of 2016, as metals commodity markets have improved dramatically during the first half of 2016.  Equity markets may strengthen periodically in response to favorable price movements in certain metals during 2016, providing some companies with the opportunity to take advantage of short periods of positive sentiment in the market. However, until metal price momentum across the board becomes bullish, equity financing in the mining industry will remain challenging. Analyst estimates for the remainder of 2016 are for stabilizing precious metals markets, and improving prices for zinc.


The Company continued to operate on a limited budget during the second quarter of 2016 while funding the maintenance of the South Mountain Project during which additional financing is being sought or the Project.  The Company’s plan of operation for the next twelve months, subject to business conditions, will be to continue to explore and develop the South Mountain Project in order to complete an industry standard Feasibility Study.  

 

Work on the Trout Creek Project will continue in 2016, although the South Mountain Project will still remain the focus.  At the Trout Creek Project, the following is planned:


·

Drill pre-defined drill target on the Joint Exploration area with Newmont Mining.

·

Analyze the drill data, and prepare for further exploration in the 2017 season.

·

Continue geophysical interpretation of the valley area. Define potential drill targets and develop additional drill targets for remaining field season of 2016.


South Mountain Project, Owyhee County, Idaho


The land package at South Mountain consists of a total of approximately 1,518 acres, consisting of (i) 17 patented claims (326 acres) and 360 acres of private land; (ii) lease on private ranch land (542 acres); and, (iii)  21 unpatented lode mining claims on BLM managed land (290 acres).  All holdings are located in the South Mountain Mining District, Owyhee County, Idaho.


The property is located approximately 70 air miles southwest of Boise, Idaho and approximately 24 miles southeast of Jordan Valley, Oregon. It is accessible by highway 95 driving south from the Boise area to Jordan Valley Oregon, then by traveling southeast approximately 22 miles back into Idaho, via Owyhee County road that is dirt and improved to within 4 miles of historic mine site. The last 4 miles up the South Mountain Mine road are unimproved dirt road. The property is accessible year-round to within 4 miles of the property, where the property is accessible from May thru October without plowing snow. There is power to within 4 miles of the site as well. The climate is considered high desert. The Company has water rights on the property, and there is a potable spring on the property that once supplied water to the main camp.




11





Status of Owyhee Gold Territory (South Mountain Project)


Currently, the project is in a care and maintenance status while new capital is sought. Thunder Mountain Gold continues conducting due diligence with new capital partners, and has narrowed down the number of potential financing partners that they have been working with to continue advancement of South Mountain.  Management remains optimistic that a capital partner will be selected in the coming months.


During the second Quarter, there were on-going legal filings with respect to the previously mentioned legal action involving the SMMI and its former partner at South Mountain. These filings are mostly procedural in nature. To date, the court has not issued any adverse rulings to the Company and sided with the Company’s proposed litigation schedule.  SMMI continues to pursue a legal remedy that perfects its ownership in the project, and is confident that the court will find in their favor.

As a result of this legal matter, there is a possible loss contingency or financial impairment from the ongoing default by ISGC, as the parties continue to engage in discussions as to possible courses of agreement and cure. The Company remains positive about resuming exploration and development, with expectations that metals markets will continue to remain strong in coming months.


SMMI as Manager of OGT and the associated assets, continued work on South Mountain Project, including management of the existing permit stipulations and compliance.  The Company applied to Owyhee County Planning and Zoning for a 4-year extension of the Conditional Use Permits in September 2015, for both the South Mountain mine site and mill site. The Commission unanimously granted SMMI the extensions subject to the conditions of the Permits.


Property History


The limited historic production peaked during World War II when, based on smelter receipts, the production of direct shipped ore totaled 53,653 tons containing 3,118 ounces of gold, 566,439 ounces of silver, 13,932 pounds of copper, 2,562,318 pounds of lead and 15,593,061 pounds of zinc.  In addition to the direct-ship ore, a flotation mill was constructed and operated during the late-1940s and early-1950s. The Company purchased South Mountain Mines Inc. in 2008.  


Qualified Person – Edward D. Fields is the Qualified Person as defined by National Instrument 43-101 responsible for the technical data reported in this news release.


This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7. There are currently no permits required for conducting exploration in accordance with the Company`s current board approved exploration plan.


Trout Creek Project, Lander County, Nevada


The Trout Creek pediment exploration gold target is located along the eastern flank of Reese River Valley along the pediment of the Shoshone Range in Lander County, Nevada. The claim package consists of 78 unpatented mining claims (approximately 1560 acres) that are situated along a recognizable structural zone in the Eureka-Battle Mountain mineralized gold trend.  In addition to the claims, a joint venture exploration agreement with Newmont Mining covering approximately 25 square miles on which Newmont owns the mineral rights on about half that land package.  The mineral rights consist of their ownership of the Continental Railroad sections.  


The Project is located approximately 155 air miles northeast of Reno, Nevada, or approximately 20 miles SW of Battle Mountain, Nevada, in Sections 10, 11, 14, 16, 21, 22, 27; T.29N.; R.44E. Mount Diablo Baseline & Meridian, Lander County, Nevada. Latitude:   40    23’ 36” North, Longitude: 117   00’ 58” West. The property is accessible by traveling south from Battle Mountain Nevada on state highway 305, which is paved. The project is generally accessible year round. There is no power, no water other than seasonal surface precipitation and associated streams that flow from the Shoshone Range, and there are no improvements on the property.



12






The Trout Creek target is based on a regional gravity anomaly on a well-defined northwest-southeast trending break in the alluvial fill thickness and underlying bedrock.  Previous geophysical work in the 1980s revealed an airborne magnetic anomaly associated with the same structure, and this was further verified and outlined in 2008 by Company personnel using a ground magnetometer. The target is covered by alluvial fan deposits of unknown thickness shed from the adjacent Shoshone Range, a fault block mountain range composed of Paleozoic sediments of both upper and lower plate rocks of the Roberts Mountains thrust. The geophysical anomaly could define a prospective and unexplored target within a well mineralized region.


All those certain unpatented lode claims situated in Lander County, Nevada, more particularly described as follows below:


Name of Claim

Lander Co. Doc. No.

BLM NMC No.

TC-1

0248677

965652

TC-2

0248678

965653

TC-3

0248679

965654

TC-4

0248680

965655

TC-5

0248681

965656

TC-6

0248682

965657

TC-7

0248683

965658

TC-8

0248684

965659

TC-9

0248685

965660

TC-10

0248686

965661

TC-11

0248687

965662

TC-12

0248688

965663

TC-31

0248707

965682

TC-32

0248708

965683

TC-51

0248727

965702

TC-52

0248728

965703

TC-53

0248729

965704

TC-54

0248730

965705

TC-55

0248731

965706



13






Name of Claim

Lander Co. Doc. No.

BLM NMC No.

TC-56

0248732

965707

TC-57

0248733

965708

TC-58

0248734

965709

TC-59

0251576

988946

TC-60

0251577

988947

TC-61

0251578

988948

TC-62

0251579

988949

TC-63

0251580

988950

TC-64

0251581

988951

TC-65

0251582

988952

TC-66

0251583

988953

TC-67

0251584

988954

TC-68

0251585

988955

TC-69

0251586

988956

TC-70

0251587

988957

TC-71

0251588

988958

TC-72

0251589

988959

TC-73

0251590

988960

TC-74

0251591

988961

TC-75

0251592

988962

TC-76

0251593

988963

TC-77

0251594

988964

TC-78

0251595

988965

TC-79

0251596

988966

TC-80

0251597

988967

TC-81

0251598

988968

TC-82

0251599

988969

TC-83

0251600

988970

TC-84

0251601

988971

TC-85

0251602

988972

TC-86

0251603

988973

TC-87

0251604

988974

TC-88

0251605

988975

TC-89

0251606

988976

TC-90

0251607

988977

TC-91

0251608

988978

TC-92

0251609

988979

TC-93

0251610

988980

TC-94

0251611

988981

TC-95

0251612

988982

TC-96

0251613

988983


An extensive data package was made available by Newmont to Thunder Mountain Gold, and follow-up fieldwork was undertaken once the agreement was finalized.  This fieldwork consisted of mapping the altered and mineralized structures that can be followed through the Shoshone Range.  Of importance is that these structures align with the Cortez-Pipeline deposits and the Phoenix deposit (part of the Eureka-Battle Mountain-Getchell Trend).  


In addition to the geologic fieldwork, Wright Geophysics conducted a ground gravity survey and CSMAT over the pediment target area and this provided insight into the gravel-bedrock contact as well as defining the favorable structural setting within the buried bedrock.  An untested drill target was identified under the gravel pediment along these structures, and the geophysics showed that the bedrock was within a reasonable depth for exploration drilling and potential mining if a significant mineralization is encountered.




14






In early October 2015, the Company signed an Amendment with Newmont USA Limited that modifies and extends the original Trout Creek Joint Exploration Agreement. The extension allows the Company additional time periods to complete work requirements on the project and reduces the yearly work obligations.


The ongoing exploration field work, including claim maintenance and assessment, is financed by the Company through sales of unregistered common stock funded by the Company through private placements with accredited investors.  Future work will be funded in the same manner.  


Qualified Person – Edward D. Fields is the Qualified Person as defined by National Instrument 43-101 responsible for the technical data reported in this news release.

    

There are currently no environmental permits required for the planned exploration work on the property. In the future, a notice of intent may be required with the Bureau of Land Management.  This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7.


Competition


We are an exploration stage company. We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.


Employees


At June 30, 2016, SMMI has accrued payroll of $427,000. These salaries were earned in accordance with the OGT LLC operating agreement and have been recorded on SMMI’s books. OGT Management includes SMMI`s Eric Jones, Jim Collord, and Larry Thackery as CFO. These salaries will continue be deferred until a later date.


Results of Operations:


The Company had no revenues and no production for the six months ending June 30, 2016. Total expenses for the six months ending June 30, 2016 increased from the same respective time frame ending 2015 by $5,628, up 1.44% in total expenses of $397,213. Exploration expenses for the six months ended June 30, 2016, increased by $20,785, when compared to same period in 2015. Legal and accounting increased from 2015 by the amount of $69,915 for a total of legal and accounting expenses of $166,559. Management and administrative expense decreased by $85,072 or 38.3%, for a total expense of $136,834. There was a slight increase of $5,628 in total expenses is due to ongoing maintenance with the South Mountain Mine project, while SMMI entered into discussions with ISGC over the future of the OGT venture. The Company decided to maintain the cost, of the venture, as its own expenses because it is not clear whether SMMI will be reimbursed by OGT.   During the six months ending June 30, 2016, the Company has recognized expenses of $300,332 it has paid on behalf of OGT. Included in the total expenditures is $153,000 of deferred payroll and legal fees of $118,438 incurred for the six months ending June 30, 2016.



15






Liquidity and Capital Resources:


The consolidated financial statements for the period ending June 30, 2016, disclose a ‘going concern’ qualification to our ability to continue in business. The consolidated financial statements for the period then ended have been prepared under the assumption that we will continue as a going concern. Such assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements for the period ended June 30, 2016, we did not have sufficient cash reserves to cover normal operating expenditures for the following 12 months. These factors raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.


Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis, to obtain additional financing as may be required, or ultimately to attain profitability. Potential sources of cash, or relief of demand for cash, include additional external debt, the sale of shares of our stock or alternative methods such as mergers or sale of our assets. No assurances can be given, however, that we will be able to obtain any of these potential sources of cash. We currently require additional cash funding from outside sources to sustain existing operations and to meet current obligations and ongoing capital requirements.


Our plans for the long term continuation as a going concern include financing our future operations through sales of our common stock and/or debt and the eventual profitable exploitation of our mining properties. Our plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for equity in the property.

 

While the Company does not currently have cash sufficient to support the currently planned aggressive exploration work at South Mountain, we believe that the survivability of Thunder Mountain Gold can be assured by the following:


·

At August 4, 2016, we had $14,449 cash in our bank accounts.


·

Management and the Board have not undertaken plans or commitments that exceed the cash available to the Company.  We do not include in this consideration any additional investment funds mentioned below. Management is committed to manage expenses of all types so as to not exceed the on-hand cash resources of the Company at any point in time, now or in the future.


We firmly believe we can outlast the current disruptions in the investment markets and continue to attract investment dollars in coming months and years.  The Company will also consider other sources of funding, including potential mergers and/or additional farm-out of some of its exploration properties.


For the period ended June 30, 2016, net cash used for operating activities was $268,162, consisting of net loss of $399,353 for the period ended June 30, 2016, reduced by non-cash expenses and net cash provided by changes in current assets and current liabilities. Cash provided by financing activities for period ended June 30, 2016 totaled $227,500.


Our future liquidity and capital requirements will depend on many factors, including timing, cost and progress of our exploration efforts, our evaluation of, and decisions with respect to, our strategic alternatives, and costs associated with the regulatory approvals. If it turns out that we do not have enough money to complete our exploration programs, we will try to raise additional funds from a public offering, a private placement, mergers, farm-outs or loans.


We know that additional financing will be required in the future to fund our planned operations. We do not know whether additional financing will be available when needed or on acceptable terms, if at all. If we are unable to raise additional financing when necessary, we may have to delay our exploration efforts or any property acquisitions or be forced to cease operations. Collaborative arrangements may require us to relinquish our rights to certain of our mining claims.



16






Private Placement


On February 28, 2015, the Company entered into a subscription agreement with a two individuals whereby the company sold 4,000,000 shares, at US$0.05 per share. There were no warrants associated with the subscriptions. As of March 15, 2015, the Company has issued the 4,000,000 shares under this agreement, and the placement is closed.


On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering to purchase, in the aggregate, 6,700,000 shares of common stock. There was no minimum offering.  The minimum individual subscription was $25,000 for non-insiders.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance.  The closing date for the financing was January 22, 2016, and the Company received $335,000 in total proceeds.


The offering was believed exempt from registration pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(6) the Securities Act of 1933, as amended.  The securities offered, sold, and issued in connection with the private placement have not been or are not registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements.


Subsequent Events


In July 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.



Contractual Obligations

During 2008 and 2009, three lease arrangements were made with land owners that own land parcels adjacent to the Company’s South Mountain patented and unpatented mining claims.  The leases were for a seven-year period, with options to renew, with annual payments (based on $20 per acre) listed in the following table.  The leases have no work requirements.


Contractual obligations

Payments due by period

Total*

Less than 1 year

2-3 years

3-5 years

More than 5 years

Acree Lease (yearly, June)(1)

$9,040

$2,260

$4,520

$2,260

-

Lowry Lease (yearly, October)(1)(2)

$30,160

$7,540

$15,080

$7,540

-

Herman Lease (yearly, April)

$  5,600

$1,120

$2,240

$2,240

-

      Total

$44,800

$10,920

$21,840

$12,040

-


(1)

Amounts shown are for the lease periods years 4 through 7, a total of 1 years that remains after 2013, the second year of the lease period.

(2)

The Lowry lease has an early buy-out provision for 50% of the remaining amounts owed in the event the Company desires to drop the lease prior to the end of the first seven-year period.


Critical Accounting Policies

We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management’s judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future.  The critical accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:




17





a)

Estimates. 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 increase, these judgments become even more subjective and complex.  Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates.  Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition.


b)

Stock-based Compensation. The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation” using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.


c)

Income Taxes. We have current income tax assets recorded in our financial statements that are based on our estimates relating to federal and state income tax benefits. Our judgments regarding federal and state income tax rates, items that may or may not be deductible for income tax purposes and income tax regulations themselves are critical to the Company’s financial statement income tax items.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk


Not required for smaller reporting companies.


Item 4.  Controls and Procedures


Evaluation of Disclosure Controls and Procedures


At the end of the period covered by this report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s Management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the Securities and Exchange Act of 1934, as amended).


Changes in Internal Controls over Financial Reporting


During the quarter covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.



18






PART II – OTHER INFORMATION


Item 1.  Legal Proceedings.

None.

Item 1A. Risk Factors.


Not required for smaller reporting companies.


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


On February 28, 2015, the Company entered into a subscription agreement with a two individuals whereby the company sold 4,000,000 shares at US $0.05 per share. There were no warrants associated with the subscriptions. The Company received $200,000 in gross proceeds from the Private Placement. As of March 15, 2015, the Company has issued the 4,000,000 shares under this agreement, and the placement is closed.


Under Rule 501(a) of Regulation D, these units were sold to "accredited investors" which within the meaning of section 2(15) of the Act and Rule 501, et seq. of Regulation "D", these transactions are intended to be exempt from registration under the Act by virtue of section 4(2) of the Act and the provisions of Rule 506 of Regulation D as promulgated thereunder.


On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance. The Company sold 5,700,000 shares of common stock at a rate of $0.05 for $235,000 in cash and $50,000 in a Stock subscription receivable.  In addition, Mr. Jones and Mr. Collord exchanged $50,000 of their notes outstanding (see Note 4) into 1,000,000 shares of common stock at the same rate of $0.05 per share.    There were no warrants issued with the shares.


During July of 2016, Company received subscriptions from the exercising of outstanding warrants.  These warrants were issued as part of the units sold during the previously announced Private Placement that closed on November 24, 2014. These warrants were 18-month warrants, and set to expire on May 24, 2016, but were extended for six additional months to November 24, 2016, and also discounted from the issued strike price of $0.15 down to $0.10. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.


Item 3.  Defaults Upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures


Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities.


During the three months ended June 30, 2016, the Company did not have any operating mines and therefore had no such specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.


Item 5.  Other Information


None.



19






Item 6.  Exhibits


(a)

Documents which are filed as a part of this report:



Exhibits:


31.1 – Certification Required by Rule 13a-14(a) or Rule 15d-14(a). Jones

31.2 – Certification Required by Rule 13a-14(a) or Rule 15d-14(a). Thackery

32.1 – Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Jones

32.2 – Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Thackery


101*

The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) Consolidated Notes to Financial Statements



20








SIGNATURES


Pursuant to the requirements of Section 13 or 15(b) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.


THUNDER MOUNTAIN GOLD, INC.


/s/ Eric T. Jones

By                                                    

Eric T. Jones

President and Chief Executive Officer

Date: August 15, 2016


Pursuant to the requirements of the Securities Act of 1934 this report signed below by the following person on behalf of the Registrant and in the capacities on the date indicated.


      

/s/ Larry Thackery

By                                                

Larry Thackery

Chief Financial Officer

Date; August 15, 2016






21


EX-31 2 ex31a.htm CERTIFICATION Exhibit 31

Exhibit 31.1


CERTIFICATION


I, Eric T. Jones, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Thunder Mountain Gold, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 15, 2016



By:   /s/ Eric T. Jones                              

         President, Director and Chief Executive Officer


A signed original of this written statement has been provided to the registrant and will be retained by the registrant to be furnished to the Securities and Exchange Commission or its staff upon request.




EX-31 3 ex31b.htm CERTIFICATION Exhibit 31

Exhibit 31.2


CERTIFICATION


I, Larry Thackery, certify that:

1.

I have reviewed this quarterly report on Form 10Q of Thunder Mountain Gold, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 15, 2016


By: /s/ Larry Thackery                                       

Larry Thackery

Chief Financial Officer


A signed original of this written statement has been provided to the registrant and will be retained by the registrant to be furnished to the Securities and Exchange Commission or its staff upon request.




EX-32 4 ex32a.htm CERTIFICATION Exhibit 32

Exhibit 32.1


CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Thunder Mountain Gold Inc, (the "Company") on Form 10-Q for the period ending June 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Eric T. Jones, President, Director and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



        /s/ Eric T. Jones

By  __________________________________

Eric T. Jones

President, Director and Chief Executive Officer

Date: August 15, 2016














EX-32 5 ex32b.htm CERTIFICATION Exhibit 32





Exhibit 32.2


CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Thunder Mountain Gold Inc, (the "Company") on Form 10-Q for the period ending June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Larry Thackery, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



By: /s/ Larry Thackery                                       

Larry Thackery

Chief Financial Officer

Date: August 15, 2016













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(&#147;Thunder Mountain&#148; or &#147;the Company&#148;) was originally incorporated under the laws of the State of Idaho on November 9, 1935, under the name of Montgomery Mines, Inc.&#160; In April 1978, the Montgomery Mines Corporation was obtained by a group of the Thunder Mountain property holders and changed its name to Thunder Mountain Gold, Inc., with the primary goal to further develop their holdings in the Thunder Mountain Mining District, located in Valley County, Idaho. Thunder Mountain Gold, Inc. takes its name from the Thunder Mountain Mining District, where its principal lode mining claims were located. For several years, the Company&#146;s activities were restricted to maintaining its property position and exploration activities. During 2005, the Company sold its holdings in the Thunder Mountain Mining District. During 2007, the Company acquired the South Mountain Mines property in southwest Idaho and initiated exploration activities on that property, which continue today.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Basis of Presentation and Going Concern</u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to the Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. For further information, refer to the financial statements and the footnotes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company&#146;s ability to raise capital to fund its future exploration and working capital requirements. The Company&#146;s plans for the long-term return to and continuation as a going concern include financing the Company&#146;s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company&#146;s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Investments in Joint Venture</u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company&#146;s accounting policy for joint ventures is as follows:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:0pt;text-align:justify;text-indent:0pt;text-autospace:none'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are carried at cost. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:0pt;text-align:justify;text-indent:0pt;text-autospace:none'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company&#146;s share of the ventures&#146; earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:0pt;text-align:justify;text-indent:0pt;text-autospace:none'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is typically consolidated with the presentation of non-controlling interest.&#160; In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture&#146;s management committee.&#160;&#160; However, see Note 3 regarding the Company&#146;s accounting for its investment in Owyhee Gold Trust, LLC,</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><u><font lang="X-NONE">Recent Accounting Pronouncements</font></u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font lang="X-NONE">&nbsp;</font></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font lang="X-NONE">Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.</font></p> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'><u><font lang="X-NONE">Net Income (Loss) Per Share</font></u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'><font lang="X-NONE">The Company is required to have dual presentation of basic earnings per share (&#147;EPS&#148;) and diluted EPS.&#160; Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including options and warrants to purchase the Company&#146;s common stock.&#160; </font>As of June 30, 2016 and 2015, the remaining potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="471" style='width:353.0pt;border-collapse:collapse'> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b><u>For the period ended June 30,</u></b></p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>2016</b></p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>2015</b></p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Stock options</p> </td> <td width="76" valign="top" style='width:57.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> <td width="80" valign="top" style='width:60.3pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Warrants</p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5,015,000</p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5,015,000</p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>&#160;&#160;&#160; </b><b>Total possible dilution</b></p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:double windowtext 1.5pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'><b>9,005,000</b></p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'><b>9,005,000</b></p> </td> </tr> </table> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>2.&#160; &#160;&#160; Commitments </b></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On March 21, 2011, the Company signed an exploration agreement with Newmont Mining Corporation (&#147;Newmont&#148;) on the Trout Creek Project that significantly expands the Trout Creek target area. Newmont&#146;s private mineral package added to the Project surrounds the Company&#146;s South Mountain claim group and consists of about 9,565 acres within a thirty-square mile Area of Influence defined in the agreement.&#160; Under the terms of the agreement, the Company is responsible for conducting the exploration program and is obligated to expend a minimum of $150,000 over the ensuing two years, with additional expenditures possible in future years.&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On October 1, 2015, the Company signed an Amendment with Newmont USA Limited that modifies and extends the original Trout Creek Joint Exploration Agreement. The extension allows the Company modified work commitments on the project reducing the annual amount to $150,000 of work obligations by October 31, 2016. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; South Mountain Project</b></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On November 8, 2012, the Company, through its wholly-owned subsidiary South Mountain Mines, Inc., (&#147;SMMI&#148;), and Idaho State Gold Company II, LLC (&#147;ISGC II&#148;) formed the Owyhee Gold Trust, LLC, (&#147;OGT&#148;) a limited liability company. The Company&#146;s initial contribution in accordance with the Operating Agreement, was the non-cash contribution of its South Mountain Mine property and related mining claims located in southwestern Idaho in Owyhee County which had a carrying value of $479,477 at the date of contribution, but for purposes of the Operating Agreement, valued at $6.725 Million. As its initial contribution to OGT, ISGC II agreed to fund operations totaling $18 million; or $8 million if the Company exercises its option to participate pro-rata after ISGC II expends $8 million and completes work commitments including a Feasibility Study, and a certain amount of required underground core drilling. &nbsp;ISGC II was the initial manager of OGT LLC. Upon payment of $1 million, and a work commitment of $2 million in pre-determined qualifying expenditures not later than December 31, 2014, ISGC II was to receive 2,000 units representing a vested 25% ownership. As of December 31, 2014, none of these ownership units had been issued to ISGC II. &nbsp;Through December 31, 2014, the Company accounted for its investment in the OGT by the cost method.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On January 27, 2015, SMMI became manager of the OGT under the terms of the November 8, 2012 operating agreement, because ISGC II had effectively resigned under the Agreement. This appointment as Manager was further ratified by a Judge`s Court Order on March 1, 2016. &#160;Beginning in January 2015, SMMI paid OGT&#146;s expenses to ensure ongoing operations at the site. For the six-month period ending June 30, 2016 and for the year ended December 31, 2015, the Company incurred expenses of $300,332 and $693,592, respectively relating to OGT operations. The Company has recognized these expenses in these consolidated financial statements because, due to the dispute discussed below, it is not clear as to whether SMMI will be reimbursed by OGT.&#160; At June 30, 2016 and December 31, 2015, accrued payroll for services performed relating to the operation of OGT was $427,000 and $274,000, respectively.&#160; The accrued payroll was earned by three of the Company&#146;s officers whose balances at June 30, 2016 are as follows:&#160; Eric Jones, President and Chief Executive Officer - $170,000, James Collord, Vice President and Chief Operating Officer - $170,000, and Larry Thackery, Chief Financial Officer - $87,000.&#160; None of the compensation has been paid.&#160;&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>SMMI maintains that ISGC II did not earn its ownership units, and resigned under the terms of the Operating Agreement, causing SMMI to become manager. ISGC II did not agree that SMMI became manager of OGT in early 2015. However, that disagreement was corrected on March 1, 2016, when a Judge`s Order stipulated that SMMI was in fact Manager.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>In December 2015, the Company received service of a Complaint that had been filed but not served on June 22, 2015, namely <i>Idaho State Gold Co. II, LLC, an Idaho limited liability company;</i> <i>and, Owyhee Gold Territory, LLC, an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation</i>, et al.,.&#160; At December 31, 2015, the status of the lawsuit was pending and management is unable to predict the outcome due to the early stages of the litigation.&#160;&#160; The probability of loss is unknown and the financial statements do not include any adjustment related to litigation.&#160;&#160;&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&#160;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On January 11, 2016, the Company answered the complaint it received in December 2015.&#160;&#160; In its response, the Company asserts that:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin-left:54.0pt;text-align:justify;text-indent:-18.0pt'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>ISGC II failed to make its initial contribution, including earn in requirements described by the OGT agreement; </p> <p style='margin-left:54.0pt;text-align:justify;text-indent:-18.0pt'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>ISGC II failed to provide accounting consistent with generally accepted accounting practices, along with an independent audit required for issuance of ownership units; and </p> <p style='margin-left:54.0pt;text-align:justify;text-indent:-18.0pt'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>Significant damages are payable by ISGC II to the Company. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On February 16, 2016, ISGC II filed a motion for a more definitive statement asserting that the Company&#146;s response was not specific enough. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On March 1, 2016, the Company was awarded a Court Order approving defined stipulations and dismissing of certain portions of a December Complaint.&#160; The Court Order acknowledged and confirmed the Company&#146;s assertions, and stipulated that: </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>a.&nbsp;&nbsp;&nbsp; As of March 1, 2016, the Company&#146;s wholly owned subsidiary, SMMI, is the manager of OGT for all lawful purposes and shall have the right to advance the project and the interests of OGT and the South Mountain Mine Project according to the terms of OGT&#146;s November 8, 2012, Operating Agreement and the Parties November 8, 2012, Member Agreement; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>b.&nbsp;&nbsp;&nbsp; OGT is the owner of the real property described in the Operating Agreement signed by both parties November 8, 2012, and confirmed by certain Quitclaim Deed and filed on October 31, 2013, without any without any claim or encumbrance by Defendants; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>c.&nbsp;&nbsp;&nbsp;&nbsp; ISGC II acknowledges that a Statement of Authority should be filed with the Idaho Secretary of State that identifies SMMI as Manager of OGT effective the date of this Stipulation; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>d.&nbsp;&nbsp;&nbsp; Because of conflicts of interest, OGT, and the Company&#146;s subsidiaries THMG and THMR were dismissed from the litigation; and</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>e.&nbsp;&nbsp;&nbsp;&nbsp; ISGC II shall not sell or cause to be sold any of the equipment and assets described in the ISGC II financial reports without prior notice and the concurrence of OGT, with SMMI acting as manager of OGT; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>f.&nbsp;&nbsp;&nbsp;&nbsp; ISGC II&#146;s motion for a more definite statement is withdrawn.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Because of the Court Order above, ISGC II was required to withdraw their original Complaint. ISGC II filed an amended Complaint on March 14, 2016 in which it claims it is entitled to vesting of Units in OGT based solely upon the funds they spent towards the South Mountain mining project, or based upon an equitable claim.&#160;&#160; The Company deems their claims erroneous and without merit, and that funds were spent outside of compliance with the Operating Agreement, and without proper controls or accounting. The Company will aggressively and vigorously defend against this lawsuit, and is confident of a positive legal outcome for the Company in Idaho Court.&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>At December 31, 2015 and June 30, 2016, because of the uncertainty as to the status of OGT and the share allocation between SMMI and OGT, the Company has continued to account for its investment at cost and has recognized the expenses incurred in 2015 and the first six months of 2016 for the operation of OGT.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>4. &#160;&#160;Related Party Notes Payable</b></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On December 9, 2014 the Company executed two promissory notes payable to directors, Eric Jones and Jim Collard. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>The original convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On July 1, 2015, these notes were extended to December 31, 2015.&#160; As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month.&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font lang="EN">The extension contained a conversion feature. The note holder can convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015. </font></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font lang="EN">During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively.&#160; </font>On the due date of the notes, December 31, 2015, these notes were extended to January 31, 2016.&#160; In connection with this extension, the accrued interest balance of $30,000 was added to the principal balance resulting in a new outstanding principal balance of $171,076.&#160;&#160; Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock.&#160;&#160; In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each from their related notes payables for a total of 1 million shares (see Note 6). </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>During the six months ended June 30, 2016, the Company paid $7,500 on Mr. Jones&#146; outstanding note balance.&#160; At June 30, 2016, the notes payable balances were $51,769 and $61,808 for Mr. Jones and Mr. Collord, respectively.&#160; Also at June 30, 2016, accrued interest payable balances were $3,403 and $3,949 for Mr. Jones and Mr. Collord, respectively.&#160; &#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>5.&#160;&#160;&#160;&#160; Related Party transactions</b></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>In addition to the related party notes payable discussed in Note 4, the Company has engaged Baird Hanson LLP (&#147;Baird&#148;), a company owned by one of the Company&#146;s directors, to provide legal services in the OGT matter (see Note 3).&#160; Legal expenses of $54,000 and $123,108 have been incurred for these services during the six months ended June 30, 2016 and the year ended December 31, 2015, respectively.&#160;&#160; At June 30, 2016 and December 31, 2015, the amounts due to Baird are $145,178 and $123,038, respectively.&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>6. &#160;&#160;&#160; Stockholders&#146; Equity</b></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>The Company&#146;s common stock has a par value of $0.001 with 200,000,000 shares authorized. The Company also has 5,000,000 authorized shares of preferred stock with a par value of $0.0001.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>During the year ended December 31, 2015, the Company sold 4,000,000 shares at $0.05 per share for total proceeds of $200,000.&#160;&#160; No warrants were issued with the shares.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate 6,700,000 shares of common stock.&#160; Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance. The Company sold 5,700,000 shares of common stock at a rate of $0.05 for $235,000 in cash and $50,000 in a Stock subscription receivable.&#160; In addition, Mr. Jones and Mr. Collard exchanged $50,000 of their notes outstanding (see Note 4) into 1,000,000 shares of common stock at the same rate of $0.05 per share.&#160; There were no warrants issued with the shares.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font style='background:#FCFCFC'>On May 12, 2016 the Company extended the expiration date of five million (5,015,000) outstanding warrants issued during 2014 for an additional 6 months (November 24, 2016).&nbsp; The Company also reduced the exercise price from $0.15 to $0.10. </font></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>7. &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Stock Options</b></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>The Company has established a Stock Option Incentive Plan (&#147;SIP&#148;) to authorize the granting of stock options up to 10 percent of the total number of issued and outstanding shares of common stock to employees, directors and consultants. Upon exercise of options, shares are issued from the available authorized shares of the Company.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Option awards are generally granted with an exercise price equal to the fair market value of the Company&#146;s stock at the date of grant.&nbsp; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On February 6, 2015, the Board approved a grant of one million options to purchase shares of common stock under the SIP to Directors, Executive Officers and other non-employees&#146; consultants. The granted options have been valued and recorded using the Black Scholes model. The Black Scholes calculation on the 1,000,000 options that were issued was a fair value of $0.06 per option ($60,000 in total). The SIP was approved by shareholder vote during the January 20, 2015 annual shareholder meeting. The options were fully vested upon grant and recognized as compensation expense for the year ended December 31, 2015.&#160;&#160;&#160; No options were granted during the six months ended June 30, 2016.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>The fair value of each option award was estimated on the date of the grant using the assumptions noted in the following table:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="271" style='width:203.0pt;border-collapse:collapse'> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Stock price</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.06</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Exercise price</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.06</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Expected volatility</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>230.09%</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Expected dividends</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Expected terms (in years)</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5.0</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Risk-free rate</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>1.31%</p> </td> </tr> </table> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>The following is a summary of the Company&#146;s options issued under the Stock Option Incentive Plan:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="559" style='width:419.0pt;border-collapse:collapse'> <tr style='height:56.4pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:56.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="107" valign="bottom" style='width:80.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:56.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>Shares</b></p> </td> <td width="101" valign="bottom" style='width:76.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:56.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>Weighted Average Exercise Price</b></p> </td> </tr> <tr style='height:14.4pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Outstanding at December 31, 2013 and 2014</p> </td> <td width="107" valign="bottom" style='width:80.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>2,990,000</p> </td> <td width="101" valign="bottom" style='width:76.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.20</p> </td> </tr> <tr style='height:14.4pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>&#160;&#160;&#160; Granted in 2015</p> </td> <td width="107" valign="bottom" style='width:80.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>1,000,000</p> </td> <td width="101" valign="bottom" style='width:76.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>0.06</p> </td> </tr> <tr style='height:15.0pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:15.0pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Outstanding and exercisable at December 31, 2015 and June 30, 2016</p> </td> <td width="107" valign="bottom" style='width:80.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;padding:0pt 5.4pt 0pt 5.4pt;height:15.0pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> <td width="101" valign="bottom" style='width:76.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;padding:0pt 5.4pt 0pt 5.4pt;height:15.0pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.17</p> </td> </tr> </table> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>The average remaining contractual term of the options outstanding and exercisable at June 30, 2016 was 1.35 years.&#160; As of June 30, 2016 options outstanding and exercisable had no aggregate intrinsic value.</p> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>8. &#160;&#160;&#160; Subsequent Events</b></p> <p style='margin:0pt;margin-bottom:.0001pt;margin-top:12.0pt;margin-right:0pt;margin-bottom:12.0pt;margin-left:0pt;text-align:justify'><font style='background:white'>On July 2, 2016 Company has granted 2,775,000 stock options to directors, officers, employees and consultants of the Company and its affiliates to purchase common shares in the capital stock of the Company. The options are exercisable on or before July 20, 2021 at a price of $0.10 per share. As of August 4, 2016, the Company has 4,765,000 outstanding stock options that represent 9.4% of the issued and outstanding shares of common stock.</font></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>In July 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Investments in Joint Venture</u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company&#146;s accounting policy for joint ventures is as follows:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:0pt;text-align:justify;text-indent:0pt;text-autospace:none'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are carried at cost. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:0pt;text-align:justify;text-indent:0pt;text-autospace:none'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company&#146;s share of the ventures&#146; earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:0pt;text-align:justify;text-indent:0pt;text-autospace:none'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is typically consolidated with the presentation of non-controlling interest.&#160; In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture&#146;s management committee.&#160;&#160; However, see Note 3 regarding the Company&#146;s accounting for its investment in Owyhee Gold Trust, LLC,</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><u><font lang="X-NONE">Recent Accounting Pronouncements</font></u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font lang="X-NONE">&nbsp;</font></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font lang="X-NONE">Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.</font></p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'><u><font lang="X-NONE">Net Income (Loss) Per Share</font></u></p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'><font lang="X-NONE">The Company is required to have dual presentation of basic earnings per share (&#147;EPS&#148;) and diluted EPS.&#160; Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including options and warrants to purchase the Company&#146;s common stock.&#160; </font>As of June 30, 2016 and 2015, the remaining potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="471" style='width:353.0pt;border-collapse:collapse'> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b><u>For the period ended June 30,</u></b></p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>2016</b></p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>2015</b></p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Stock options</p> </td> <td width="76" valign="top" style='width:57.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> <td width="80" valign="top" style='width:60.3pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Warrants</p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5,015,000</p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5,015,000</p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>&#160;&#160;&#160; </b><b>Total possible dilution</b></p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:double windowtext 1.5pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'><b>9,005,000</b></p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'><b>9,005,000</b></p> </td> </tr> </table> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;line-height:12.0pt'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="471" style='width:353.0pt;border-collapse:collapse'> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b><u>For the period ended June 30,</u></b></p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>2016</b></p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>2015</b></p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Stock options</p> </td> <td width="76" valign="top" style='width:57.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> <td width="80" valign="top" style='width:60.3pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Warrants</p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5,015,000</p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5,015,000</p> </td> </tr> <tr align="left"> <td width="314" valign="top" style='width:235.7pt;padding:0pt 5.4pt 0pt 5.4pt'> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><b>&#160;&#160;&#160; </b><b>Total possible dilution</b></p> </td> <td width="76" valign="top" style='width:57.0pt;border:none;border-bottom:double windowtext 1.5pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'><b>9,005,000</b></p> </td> <td width="80" valign="top" style='width:60.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0pt 5.4pt 0pt 5.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'><b>9,005,000</b></p> </td> </tr> </table> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="271" style='width:203.0pt;border-collapse:collapse'> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Stock price</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.06</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Exercise price</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.06</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Expected volatility</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>230.09%</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Expected dividends</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>-</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Expected terms (in years)</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>5.0</p> </td> </tr> <tr style='height:14.4pt'> <td width="179" valign="bottom" style='width:134.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Risk-free rate</p> </td> <td width="92" valign="bottom" style='width:69.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>1.31%</p> </td> </tr> </table> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" width="559" style='width:419.0pt;border-collapse:collapse'> <tr style='height:56.4pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:56.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>&nbsp;</p> </td> <td width="107" valign="bottom" style='width:80.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:56.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>Shares</b></p> </td> <td width="101" valign="bottom" style='width:76.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:56.4pt'> <p align="center" style='margin:0pt;margin-bottom:.0001pt;text-align:center'><b>Weighted Average Exercise Price</b></p> </td> </tr> <tr style='height:14.4pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Outstanding at December 31, 2013 and 2014</p> </td> <td width="107" valign="bottom" style='width:80.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>2,990,000</p> </td> <td width="101" valign="bottom" style='width:76.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.20</p> </td> </tr> <tr style='height:14.4pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p style='margin:0pt;margin-bottom:.0001pt'>&#160;&#160;&#160; Granted in 2015</p> </td> <td width="107" valign="bottom" style='width:80.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>1,000,000</p> </td> <td width="101" valign="bottom" style='width:76.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:14.4pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>0.06</p> </td> </tr> <tr style='height:15.0pt'> <td width="351" valign="bottom" style='width:263.0pt;padding:0pt 5.4pt 0pt 5.4pt;height:15.0pt'> <p style='margin:0pt;margin-bottom:.0001pt'>Outstanding and exercisable at December 31, 2015 and June 30, 2016</p> </td> <td width="107" valign="bottom" style='width:80.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;padding:0pt 5.4pt 0pt 5.4pt;height:15.0pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>3,990,000</p> </td> <td width="101" valign="bottom" style='width:76.0pt;border-top:solid windowtext 1.0pt;border-left:none;border-bottom:double windowtext 2.25pt;border-right:none;padding:0pt 5.4pt 0pt 5.4pt;height:15.0pt'> <p align="right" style='margin:0pt;margin-bottom:.0001pt;text-align:right'>$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 0.17</p> </td> </tr> </table> 1935-11-09 <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to the Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. For further information, refer to the financial statements and the footnotes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015.</p> <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company&#146;s ability to raise capital to fund its future exploration and working capital requirements. The Company&#146;s plans for the long-term return to and continuation as a going concern include financing the Company&#146;s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company&#146;s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.</p> The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company&#146;s ability to raise capital to fund its future exploration and working capital requirements. The Company&#146;s plans for the long-term return to and continuation as a going concern include financing the Company&#146;s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. 3990000 3990000 5015000 5015000 9005000 9005000 150000 150000 479477 <!--egx--><p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On January 27, 2015, SMMI became manager of the OGT under the terms of the November 8, 2012 operating agreement, because ISGC II had effectively resigned under the Agreement. This appointment as Manager was further ratified by a Judge`s Court Order on March 1, 2016. &#160;Beginning in January 2015, SMMI paid OGT&#146;s expenses to ensure ongoing operations at the site. For the six-month period ending June 30, 2016 and for the year ended December 31, 2015, the Company incurred expenses of $300,332 and $693,592, respectively relating to OGT operations. The Company has recognized these expenses in these consolidated financial statements because, due to the dispute discussed below, it is not clear as to whether SMMI will be reimbursed by OGT.&#160; At June 30, 2016 and December 31, 2015, accrued payroll for services performed relating to the operation of OGT was $427,000 and $274,000, respectively.&#160; The accrued payroll was earned by three of the Company&#146;s officers whose balances at June 30, 2016 are as follows:&#160; Eric Jones, President and Chief Executive Officer - $170,000, James Collord, Vice President and Chief Operating Officer - $170,000, and Larry Thackery, Chief Financial Officer - $87,000.&#160; None of the compensation has been paid.&#160;&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>SMMI maintains that ISGC II did not earn its ownership units, and resigned under the terms of the Operating Agreement, causing SMMI to become manager. ISGC II did not agree that SMMI became manager of OGT in early 2015. However, that disagreement was corrected on March 1, 2016, when a Judge`s Order stipulated that SMMI was in fact Manager.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>In December 2015, the Company received service of a Complaint that had been filed but not served on June 22, 2015, namely <i>Idaho State Gold Co. II, LLC, an Idaho limited liability company;</i> <i>and, Owyhee Gold Territory, LLC, an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation</i>, et al.,.&#160; At December 31, 2015, the status of the lawsuit was pending and management is unable to predict the outcome due to the early stages of the litigation.&#160;&#160; The probability of loss is unknown and the financial statements do not include any adjustment related to litigation.&#160;&#160;&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&#160;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On January 11, 2016, the Company answered the complaint it received in December 2015.&#160;&#160; In its response, the Company asserts that:</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin-left:54.0pt;text-align:justify;text-indent:-18.0pt'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>ISGC II failed to make its initial contribution, including earn in requirements described by the OGT agreement; </p> <p style='margin-left:54.0pt;text-align:justify;text-indent:-18.0pt'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>ISGC II failed to provide accounting consistent with generally accepted accounting practices, along with an independent audit required for issuance of ownership units; and </p> <p style='margin-left:54.0pt;text-align:justify;text-indent:-18.0pt'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>Significant damages are payable by ISGC II to the Company. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On February 16, 2016, ISGC II filed a motion for a more definitive statement asserting that the Company&#146;s response was not specific enough. </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>On March 1, 2016, the Company was awarded a Court Order approving defined stipulations and dismissing of certain portions of a December Complaint.&#160; The Court Order acknowledged and confirmed the Company&#146;s assertions, and stipulated that: </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>a.&nbsp;&nbsp;&nbsp; As of March 1, 2016, the Company&#146;s wholly owned subsidiary, SMMI, is the manager of OGT for all lawful purposes and shall have the right to advance the project and the interests of OGT and the South Mountain Mine Project according to the terms of OGT&#146;s November 8, 2012, Operating Agreement and the Parties November 8, 2012, Member Agreement; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>b.&nbsp;&nbsp;&nbsp; OGT is the owner of the real property described in the Operating Agreement signed by both parties November 8, 2012, and confirmed by certain Quitclaim Deed and filed on October 31, 2013, without any without any claim or encumbrance by Defendants; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>c.&nbsp;&nbsp;&nbsp;&nbsp; ISGC II acknowledges that a Statement of Authority should be filed with the Idaho Secretary of State that identifies SMMI as Manager of OGT effective the date of this Stipulation; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>d.&nbsp;&nbsp;&nbsp; Because of conflicts of interest, OGT, and the Company&#146;s subsidiaries THMG and THMR were dismissed from the litigation; and</p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>e.&nbsp;&nbsp;&nbsp;&nbsp; ISGC II shall not sell or cause to be sold any of the equipment and assets described in the ISGC II financial reports without prior notice and the concurrence of OGT, with SMMI acting as manager of OGT; and </p> <p style='margin:0pt;margin-bottom:.0001pt;margin-left:49.5pt;text-align:justify;text-indent:-13.5pt'>f.&nbsp;&nbsp;&nbsp;&nbsp; ISGC II&#146;s motion for a more definite statement is withdrawn.</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>Because of the Court Order above, ISGC II was required to withdraw their original Complaint. ISGC II filed an amended Complaint on March 14, 2016 in which it claims it is entitled to vesting of Units in OGT based solely upon the funds they spent towards the South Mountain mining project, or based upon an equitable claim.&#160;&#160; The Company deems their claims erroneous and without merit, and that funds were spent outside of compliance with the Operating Agreement, and without proper controls or accounting. The Company will aggressively and vigorously defend against this lawsuit, and is confident of a positive legal outcome for the Company in Idaho Court.&#160; </p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p> <p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'>At December 31, 2015 and June 30, 2016, because of the uncertainty as to the status of OGT and the share allocation between SMMI and OGT, the Company has continued to account for its investment at cost and has recognized the expenses incurred in 2015 and the first six months of 2016 for the operation of OGT.</p> On December 9, 2014 the Company executed two promissory notes payable to directors, Eric Jones and Jim Collard. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier. The original convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount. On July 1, 2015, these notes were extended to December 31, 2015. As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month. The extension contained a conversion feature. The note holder can convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015. During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively. On the due date of the notes, December 31, 2015, these notes were extended to January 31, 2016. In connection with this extension, the accrued interest balance of $30,000 was added to the principal balance resulting in a new outstanding principal balance of $171,076. Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated. On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock. In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each from their related notes payables for a total of 1 million shares (see Note 6). During the six months ended June 30, 2016, the Company paid $7,500 on Mr. Jones&#146; outstanding note balance. At June 30, 2016, the notes payable balances were $51,769 and $61,808 for Mr. Jones and Mr. Collord, respectively. Also at June 30, 2016, accrued interest payable balances were $3,403 and $3,949 for Mr. Jones and Mr. Collord, respectively. 54000 123108 145178 123038 4000000 0.05 6700000 5700000 50000 50000 1000000 0.05 1000000 0.06 60000 0.06 0.06 2.3009 P5Y 0.0131 2990000 0.20 1000000 0.06 3990000 0.17 P1Y4M6D On July 2, 2016 Company has granted 2,775,000 stock options to directors, officers, employees and consultants of the Company and its affiliates to purchase common shares in the capital stock of the Company. The options are exercisable on or before July 20, 2021 at a price of $0.10 per share. As of August 4, 2016, the Company has 4,765,000 outstanding stock options that represent 9.4% of the issued and outstanding shares of common stock. In July 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance. 0000711034 2016-01-01 2016-06-30 0000711034 2016-08-04 0000711034 2016-06-30 0000711034 2015-12-31 0000711034 2016-04-01 2016-06-30 0000711034 2015-04-01 2015-06-30 0000711034 2015-01-01 2015-06-30 0000711034 2014-12-31 0000711034 2015-06-30 0000711034 2015-01-01 2015-12-31 0000711034 2011-01-03 2013-03-21 0000711034 2015-10-01 2016-10-31 0000711034 2012-11-08 2012-11-09 0000711034 fil:PrivateOfferingMember 2016-06-30 0000711034 fil:PrivateOfferingMember 2016-01-18 2016-01-18 0000711034 fil:PrivateOffering2015Member 2016-01-01 2016-06-30 0000711034 fil:PrivateOffering2015Member 2016-06-30 0000711034 fil:PrivateOfferingMember 2016-01-18 0000711034 2015-02-06 0000711034 2014-01-01 2014-12-31 iso4217:USD shares iso4217:USD shares pure Note 4 Note 3 Note 2 EX-101.SCH 8 thmg-20160630.xsd 000020 - Statement - Thunder Mountain Gold, Inc. Consolidated Balance Sheets (Interim period unaudited) link:presentationLink link:definitionLink link:calculationLink 000100 - Disclosure - 5. Related Party Transactions link:presentationLink link:definitionLink link:calculationLink 000280 - Disclosure - 7. Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) link:presentationLink link:definitionLink link:calculationLink 000140 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations: Investments in Joint Venture (Policies) link:presentationLink link:definitionLink link:calculationLink 000300 - Disclosure - 8. Subsequent Events (Details) link:presentationLink link:definitionLink link:calculationLink 000240 - Disclosure - 4. Related Party Notes Payable (Details) link:presentationLink link:definitionLink link:calculationLink 000190 - Disclosure - 7. Stock Options: Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value (Tables) link:presentationLink link:definitionLink link:calculationLink 000270 - Disclosure - 7. Stock Options (Details) link:presentationLink link:definitionLink link:calculationLink 000170 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations: Net Income (loss) Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables) link:presentationLink link:definitionLink link:calculationLink 000160 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations: Net Income (loss) Per Share (Policies) link:presentationLink link:definitionLink link:calculationLink 000030 - Statement - Statement of Financial Position - Parenthetical link:presentationLink link:definitionLink link:calculationLink 000230 - Disclosure - 3. South Mountain Project LLC (Details) link:presentationLink link:definitionLink link:calculationLink 000260 - Disclosure - 6. Stockholders' Equity (Details) link:presentationLink link:definitionLink link:calculationLink 000060 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations link:presentationLink link:definitionLink link:calculationLink 000250 - Disclosure - 5. Related Party Transactions (Details) link:presentationLink link:definitionLink link:calculationLink 000220 - Disclosure - 2. Commitments (Details) link:presentationLink link:definitionLink link:calculationLink 000110 - Disclosure - 6. Stockholders' Equity link:presentationLink link:definitionLink link:calculationLink 000200 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations (Details) link:presentationLink link:definitionLink link:calculationLink 000130 - Disclosure - 8. Subsequent Events link:presentationLink link:definitionLink link:calculationLink 000080 - Disclosure - 3. South Mountain Project LLC link:presentationLink link:definitionLink link:calculationLink 000150 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations: Recent Accounting Pronouncements (Policies) link:presentationLink link:definitionLink link:calculationLink 000010 - Document - Document and Entity Information link:presentationLink link:definitionLink link:calculationLink 000070 - Disclosure - 2. Commitments link:presentationLink link:definitionLink link:calculationLink 000120 - Disclosure - 7. Stock Options link:presentationLink link:definitionLink link:calculationLink 000050 - Statement - Thunder Mountain Gold, Inc. Consolidated Statements of Cash Flows (unaudited) link:presentationLink link:definitionLink link:calculationLink 000090 - Disclosure - 4. Related Party Notes Payable link:presentationLink link:definitionLink link:calculationLink 000210 - Disclosure - 1. Summary of Significant Accounting Policies and Business Operations: Net Income (loss) Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) link:presentationLink link:definitionLink link:calculationLink 000290 - Disclosure - 7. Stock Options: Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value (Details) link:presentationLink link:definitionLink link:calculationLink 000040 - Statement - Thunder Mountain Gold, Inc. Consolidated Statements of Operations (unaudited) link:presentationLink link:definitionLink link:calculationLink 000180 - Disclosure - 7. Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables) link:presentationLink link:definitionLink link:calculationLink EX-101.CAL 9 thmg-20160630_cal.xml EX-101.DEF 10 thmg-20160630_def.xml EX-101.LAB 11 thmg-20160630_lab.xml Statement [Table] Proceeds from sale of common stock Expenses: Preferred Stock, Shares Issued Accounts payable and other accrued liabilities Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value Investments in Joint Venture Disclosure of policy to determine cost method, equity method or non-controlling interest. Cash and cash equivalents, beginning of period Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Accrued related party liability {1} Accrued related party liability Cash flows from operating activities: Total current liabilities Total current liabilities Entity Registrant Name Sale of Stock, Price Per Share Sale of Stock, Price Per Share Stock Issued During Period, Shares, New Issues Stock Issued During Period, Shares, New Issues Debt Instrument, Increase (Decrease) for Period, Description Basis of Accounting Policies 7. Stock Options Statement of cash flows Preferred Stock, Par Value Preferred Stock, Par Value Cash and cash equivalents ASSETS Amendment Description Current Fiscal Year End Date Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units Substantial Doubt about Going Concern, Conditions or Events Tables/Schedules Total current assets Total current assets Entity Current Reporting Status Subsequent Event, Description Private offering 2015 Private offering 2015 Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 1. Summary of Significant Accounting Policies and Business Operations Amortization of related party notes payable discounts Management and administrative Common Stock, Shares Outstanding Less: 11,700 shares of treasury stock, at cost Less: 11,700 shares of treasury stock, at cost Current assets: Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price Notes Net increase in cash and cash equivalents Weighted average common shares outstanding-basic and diluted Interest expense, related party Legal and accounting Fair Value Assumptions, Risk Free Interest Rate Fair Value Assumptions, Expected Volatility Rate Adjustments to reconcile net loss to net cash used by operating activities: Net Loss per common share-basic and diluted Accumulated deficit Total assets Total assets Entity Central Index Key Document Period End Date Document Type Document and Entity Information Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Debt Conversion, Converted Instrument, Shares Issued Accrued payroll {1} Accrued payroll Prepaid expenses and other assets {1} Prepaid expenses and other assets Total expenses Preferred Stock, Shares Outstanding Total liabilities and stockholders' equity (deficit) Total liabilities and stockholders' equity (deficit) Stockholders' equity (deficit) : Amendment Flag Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number Debt Instrument, Description Legal Matters and Contingencies Accounts payable and other accrued liabilities {1} Accounts payable and other accrued liabilities Accrued related party liability Other assets: Entity Filer Category Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures Fair Value Assumptions, Expected Term Debt Conversion, Converted Instrument, Amount Contribution of Property Minimum expenditure through date Minimum expenditure required to meet agreement Recent Accounting Pronouncements Entity Common Stock, Shares Outstanding Document Fiscal Year Focus Sale of Stock [Axis] Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants Details Net Income (loss) Per Share 6. Stockholders' Equity 5. Related Party Transactions Stock issued for payments on related parties notes payable Payments on related party note payable Total other income (expense) Common Stock, Shares Issued Common stock; $0.001 par value; 200,000,000 shares authorized,50,867,549 and 44,167,549, respectively shares issued and outstanding Commitments and Contingencies Prepaid expenses and other assets Entity Incorporation, Date of Incorporation Entity Well-known Seasoned Issuer Common Stock, Value, Subscriptions Common Stock, Value, Subscriptions 3. South Mountain Project LLC 2. Commitments Change in: Options issued for services Options issued for services Stock options issued for services, value Additional paid-in capital Accrued interest payable to related parties Current liabilities: Net Loss Net loss Foreign exchange gain (loss) Common Stock, Shares Authorized Preferred stock; $0.0001 par value, 5,000,000 shares authorized; no shares issued or outstanding Investment in Owyhee Gold Trust LLC Trading Symbol Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value Other Accrued Liabilities Substantial Doubt about Going Concern, Management's Evaluation Noncash investing and financing activities: Net cash provided by financing activities Cash flows from financing activities: Net cash used by operating activities Exploration expenses Income statement Common Stock, Par Value Preferred Stock, Shares Authorized Total stockholders' equity (deficit) Total stockholders' equity (deficit) Accrued payroll Entity Public Float Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price Aggregate shares issued in Private Offering Aggregate shares issued in Private Offering Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share Related party notes payable Document Fiscal Period Focus Legal fees paid to related party Substantial Doubt about Going Concern 8. Subsequent Events 4. Related Party Notes Payable Accrued interest payable to related parties {1} Accrued interest payable to related parties LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Statement of financial position Entity Incorporation, State Country Name Entity Voluntary Filers Fair Value Assumptions, Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number Statement [Line Items] Private offering Other income (expense): EX-101.PRE 12 thmg-20160630_pre.xml XML 13 R1.htm IDEA: XBRL DOCUMENT v3.5.0.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2016
Aug. 04, 2016
Document and Entity Information    
Entity Registrant Name Thunder Mountain Gold Inc  
Document Type 10-Q  
Document Period End Date Jun. 30, 2016  
Amendment Flag false  
Entity Central Index Key 0000711034  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q2  
Entity Common Stock, Shares Outstanding   51,477,549
Entity Incorporation, Date of Incorporation Nov. 09, 1935  
Trading Symbol thmg  

XML 14 R2.htm IDEA: XBRL DOCUMENT v3.5.0.2
Thunder Mountain Gold, Inc. Consolidated Balance Sheets (Interim period unaudited) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Current assets:    
Cash and cash equivalents $ 21,481 $ 12,143
Prepaid expenses and other assets 28,338 27,556
Total current assets 49,819 39,699
Other assets:    
Investment in Owyhee Gold Trust LLC 479,477 479,477
Total assets 529,296 519,176
Current liabilities:    
Accounts payable and other accrued liabilities 128,267 178,786
Accrued related party liability [1] 145,178 123,038
Accrued interest payable to related parties 7,352  
Accrued payroll [2] 427,000 274,000
Related party notes payable [1] 113,576 171,076
Total current liabilities 821,373 746,900
Commitments and Contingencies [3] 0 0
Stockholders' equity (deficit) :    
Preferred stock; $0.0001 par value, 5,000,000 shares authorized; no shares issued or outstanding 0 0
Common stock; $0.001 par value; 200,000,000 shares authorized,50,867,549 and 44,167,549, respectively shares issued and outstanding 50,868 44,168
Additional paid-in capital 4,522,097 4,193,797
Less: 11,700 shares of treasury stock, at cost (24,200) (24,200)
Accumulated deficit (4,840,842) (4,441,489)
Total stockholders' equity (deficit) (292,077) (227,724)
Total liabilities and stockholders' equity (deficit) $ 529,296 $ 519,176
[1] Note 4
[2] Note 3
[3] Note 2
XML 15 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
Statement of Financial Position - Parenthetical - $ / shares
Jun. 30, 2016
Dec. 31, 2015
Statement of financial position    
Preferred Stock, Par Value $ 0.0001 $ 0.0001
Preferred Stock, Shares Authorized 5,000,000 5,000,000
Preferred Stock, Shares Issued 0 0
Preferred Stock, Shares Outstanding 0 0
Common Stock, Par Value $ 0.001 $ 0.001
Common Stock, Shares Authorized 200,000,000 200,000,000
Common Stock, Shares Issued 50,867,549 44,167,549
Common Stock, Shares Outstanding 50,867,549 44,167,549
XML 16 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
Thunder Mountain Gold, Inc. Consolidated Statements of Operations (unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Expenses:        
Exploration expenses $ 48,315 $ 68,372 $ 93,820 $ 73,035
Legal and accounting 51,580 23,363 166,559 96,643
Management and administrative 67,089 86,899 136,834 221,906
Total expenses 166,983 178,634 397,213 391,585
Other income (expense):        
Interest expense, related party (3,573) (16,947) (7,352) (41,337)
Foreign exchange gain (loss) (204)   5,212  
Total other income (expense) (3,778) (16,947) (2,140) (41,337)
Net Loss $ (170,761) $ (195,581) $ (399,353) $ (432,922)
Net Loss per common share-basic and diluted $ 0.00 $ 0.00 $ (0.01) $ (0.01)
Weighted average common shares outstanding-basic and diluted 50,867,549 44,167,549 50,260,956 42,786,364
XML 17 R5.htm IDEA: XBRL DOCUMENT v3.5.0.2
Thunder Mountain Gold, Inc. Consolidated Statements of Cash Flows (unaudited) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Cash flows from operating activities:          
Net loss $ (170,761) $ (195,581) $ (399,353) $ (432,922)  
Adjustments to reconcile net loss to net cash used by operating activities:          
Options issued for services       60,000 $ 60,000
Amortization of related party notes payable discounts       11,565 11,565
Change in:          
Prepaid expenses and other assets     (782) (4,877)  
Accounts payable and other accrued liabilities     (50,519) 74  
Accrued related party liability     22,140 29,696  
Accrued interest payable to related parties     7,352    
Accrued payroll     153,000 118,000  
Net cash used by operating activities     (268,162) (218,464)  
Cash flows from financing activities:          
Proceeds from sale of common stock     285,000 250,000  
Payments on related party note payable     (7,500)    
Net cash provided by financing activities     227,500 250,000  
Net increase in cash and cash equivalents     9,338 31,536  
Cash and cash equivalents, beginning of period     12,143 31,992 31,992
Cash and cash equivalents, end of period $ 21,481 $ 63,528 21,481 $ 63,528 $ 12,143
Noncash investing and financing activities:          
Stock issued for payments on related parties notes payable     $ 50,000    
XML 18 R6.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations
6 Months Ended
Jun. 30, 2016
Notes  
1. Summary of Significant Accounting Policies and Business Operations

1.     Summary of Significant Accounting Policies and Business Operations

 

Business Operations

 

Thunder Mountain Gold, Inc. (“Thunder Mountain” or “the Company”) was originally incorporated under the laws of the State of Idaho on November 9, 1935, under the name of Montgomery Mines, Inc.  In April 1978, the Montgomery Mines Corporation was obtained by a group of the Thunder Mountain property holders and changed its name to Thunder Mountain Gold, Inc., with the primary goal to further develop their holdings in the Thunder Mountain Mining District, located in Valley County, Idaho. Thunder Mountain Gold, Inc. takes its name from the Thunder Mountain Mining District, where its principal lode mining claims were located. For several years, the Company’s activities were restricted to maintaining its property position and exploration activities. During 2005, the Company sold its holdings in the Thunder Mountain Mining District. During 2007, the Company acquired the South Mountain Mines property in southwest Idaho and initiated exploration activities on that property, which continue today.

 

Basis of Presentation and Going Concern

 

The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to the Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. For further information, refer to the financial statements and the footnotes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015.

 

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include financing the Company’s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners.

 

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

 

 

Investments in Joint Venture

 

The Company’s accounting policy for joint ventures is as follows:

 

1.                   The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are carried at cost. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.

 

2.                   If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.

 

3.                   In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is typically consolidated with the presentation of non-controlling interest.  In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee.   However, see Note 3 regarding the Company’s accounting for its investment in Owyhee Gold Trust, LLC,

 

 

Recent Accounting Pronouncements

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

 

Net Income (Loss) Per Share

 

The Company is required to have dual presentation of basic earnings per share (“EPS”) and diluted EPS.  Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including options and warrants to purchase the Company’s common stock.  As of June 30, 2016 and 2015, the remaining potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:

 

 

For the period ended June 30,

2016

2015

Stock options

3,990,000

3,990,000

Warrants

5,015,000

5,015,000

    Total possible dilution

9,005,000

9,005,000

 

 

 

XML 19 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
2. Commitments
6 Months Ended
Jun. 30, 2016
Notes  
2. Commitments

2.     Commitments

 

On March 21, 2011, the Company signed an exploration agreement with Newmont Mining Corporation (“Newmont”) on the Trout Creek Project that significantly expands the Trout Creek target area. Newmont’s private mineral package added to the Project surrounds the Company’s South Mountain claim group and consists of about 9,565 acres within a thirty-square mile Area of Influence defined in the agreement.  Under the terms of the agreement, the Company is responsible for conducting the exploration program and is obligated to expend a minimum of $150,000 over the ensuing two years, with additional expenditures possible in future years. 

 

On October 1, 2015, the Company signed an Amendment with Newmont USA Limited that modifies and extends the original Trout Creek Joint Exploration Agreement. The extension allows the Company modified work commitments on the project reducing the annual amount to $150,000 of work obligations by October 31, 2016.

 

XML 20 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
3. South Mountain Project LLC
6 Months Ended
Jun. 30, 2016
Notes  
3. South Mountain Project LLC

3.             South Mountain Project

On November 8, 2012, the Company, through its wholly-owned subsidiary South Mountain Mines, Inc., (“SMMI”), and Idaho State Gold Company II, LLC (“ISGC II”) formed the Owyhee Gold Trust, LLC, (“OGT”) a limited liability company. The Company’s initial contribution in accordance with the Operating Agreement, was the non-cash contribution of its South Mountain Mine property and related mining claims located in southwestern Idaho in Owyhee County which had a carrying value of $479,477 at the date of contribution, but for purposes of the Operating Agreement, valued at $6.725 Million. As its initial contribution to OGT, ISGC II agreed to fund operations totaling $18 million; or $8 million if the Company exercises its option to participate pro-rata after ISGC II expends $8 million and completes work commitments including a Feasibility Study, and a certain amount of required underground core drilling.  ISGC II was the initial manager of OGT LLC. Upon payment of $1 million, and a work commitment of $2 million in pre-determined qualifying expenditures not later than December 31, 2014, ISGC II was to receive 2,000 units representing a vested 25% ownership. As of December 31, 2014, none of these ownership units had been issued to ISGC II.  Through December 31, 2014, the Company accounted for its investment in the OGT by the cost method.

On January 27, 2015, SMMI became manager of the OGT under the terms of the November 8, 2012 operating agreement, because ISGC II had effectively resigned under the Agreement. This appointment as Manager was further ratified by a Judge`s Court Order on March 1, 2016.  Beginning in January 2015, SMMI paid OGT’s expenses to ensure ongoing operations at the site. For the six-month period ending June 30, 2016 and for the year ended December 31, 2015, the Company incurred expenses of $300,332 and $693,592, respectively relating to OGT operations. The Company has recognized these expenses in these consolidated financial statements because, due to the dispute discussed below, it is not clear as to whether SMMI will be reimbursed by OGT.  At June 30, 2016 and December 31, 2015, accrued payroll for services performed relating to the operation of OGT was $427,000 and $274,000, respectively.  The accrued payroll was earned by three of the Company’s officers whose balances at June 30, 2016 are as follows:  Eric Jones, President and Chief Executive Officer - $170,000, James Collord, Vice President and Chief Operating Officer - $170,000, and Larry Thackery, Chief Financial Officer - $87,000.  None of the compensation has been paid.  

 

SMMI maintains that ISGC II did not earn its ownership units, and resigned under the terms of the Operating Agreement, causing SMMI to become manager. ISGC II did not agree that SMMI became manager of OGT in early 2015. However, that disagreement was corrected on March 1, 2016, when a Judge`s Order stipulated that SMMI was in fact Manager.

 

In December 2015, the Company received service of a Complaint that had been filed but not served on June 22, 2015, namely Idaho State Gold Co. II, LLC, an Idaho limited liability company; and, Owyhee Gold Territory, LLC, an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation, et al.,.  At December 31, 2015, the status of the lawsuit was pending and management is unable to predict the outcome due to the early stages of the litigation.   The probability of loss is unknown and the financial statements do not include any adjustment related to litigation.   

 

On January 11, 2016, the Company answered the complaint it received in December 2015.   In its response, the Company asserts that:

 

·         ISGC II failed to make its initial contribution, including earn in requirements described by the OGT agreement;

·         ISGC II failed to provide accounting consistent with generally accepted accounting practices, along with an independent audit required for issuance of ownership units; and

·         Significant damages are payable by ISGC II to the Company.

 

On February 16, 2016, ISGC II filed a motion for a more definitive statement asserting that the Company’s response was not specific enough.

 

On March 1, 2016, the Company was awarded a Court Order approving defined stipulations and dismissing of certain portions of a December Complaint.  The Court Order acknowledged and confirmed the Company’s assertions, and stipulated that:

 

a.    As of March 1, 2016, the Company’s wholly owned subsidiary, SMMI, is the manager of OGT for all lawful purposes and shall have the right to advance the project and the interests of OGT and the South Mountain Mine Project according to the terms of OGT’s November 8, 2012, Operating Agreement and the Parties November 8, 2012, Member Agreement; and

b.    OGT is the owner of the real property described in the Operating Agreement signed by both parties November 8, 2012, and confirmed by certain Quitclaim Deed and filed on October 31, 2013, without any without any claim or encumbrance by Defendants; and

c.     ISGC II acknowledges that a Statement of Authority should be filed with the Idaho Secretary of State that identifies SMMI as Manager of OGT effective the date of this Stipulation; and

d.    Because of conflicts of interest, OGT, and the Company’s subsidiaries THMG and THMR were dismissed from the litigation; and

e.     ISGC II shall not sell or cause to be sold any of the equipment and assets described in the ISGC II financial reports without prior notice and the concurrence of OGT, with SMMI acting as manager of OGT; and

f.     ISGC II’s motion for a more definite statement is withdrawn.

 

Because of the Court Order above, ISGC II was required to withdraw their original Complaint. ISGC II filed an amended Complaint on March 14, 2016 in which it claims it is entitled to vesting of Units in OGT based solely upon the funds they spent towards the South Mountain mining project, or based upon an equitable claim.   The Company deems their claims erroneous and without merit, and that funds were spent outside of compliance with the Operating Agreement, and without proper controls or accounting. The Company will aggressively and vigorously defend against this lawsuit, and is confident of a positive legal outcome for the Company in Idaho Court. 

 

At December 31, 2015 and June 30, 2016, because of the uncertainty as to the status of OGT and the share allocation between SMMI and OGT, the Company has continued to account for its investment at cost and has recognized the expenses incurred in 2015 and the first six months of 2016 for the operation of OGT.

 

XML 21 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
4. Related Party Notes Payable
6 Months Ended
Jun. 30, 2016
Notes  
4. Related Party Notes Payable

4.   Related Party Notes Payable

 

On December 9, 2014 the Company executed two promissory notes payable to directors, Eric Jones and Jim Collard. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier.

 

The original convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount.

 

On July 1, 2015, these notes were extended to December 31, 2015.  As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month. 

 

The extension contained a conversion feature. The note holder can convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015.

 

During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively.  On the due date of the notes, December 31, 2015, these notes were extended to January 31, 2016.  In connection with this extension, the accrued interest balance of $30,000 was added to the principal balance resulting in a new outstanding principal balance of $171,076.   Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated.

 

On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock.   In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each from their related notes payables for a total of 1 million shares (see Note 6).

 

During the six months ended June 30, 2016, the Company paid $7,500 on Mr. Jones’ outstanding note balance.  At June 30, 2016, the notes payable balances were $51,769 and $61,808 for Mr. Jones and Mr. Collord, respectively.  Also at June 30, 2016, accrued interest payable balances were $3,403 and $3,949 for Mr. Jones and Mr. Collord, respectively.   

 

XML 22 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
5. Related Party Transactions
6 Months Ended
Jun. 30, 2016
Notes  
5. Related Party Transactions

5.     Related Party transactions

 

In addition to the related party notes payable discussed in Note 4, the Company has engaged Baird Hanson LLP (“Baird”), a company owned by one of the Company’s directors, to provide legal services in the OGT matter (see Note 3).  Legal expenses of $54,000 and $123,108 have been incurred for these services during the six months ended June 30, 2016 and the year ended December 31, 2015, respectively.   At June 30, 2016 and December 31, 2015, the amounts due to Baird are $145,178 and $123,038, respectively. 

 

XML 23 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
6. Stockholders' Equity
6 Months Ended
Jun. 30, 2016
Notes  
6. Stockholders' Equity

6.     Stockholders’ Equity

 

The Company’s common stock has a par value of $0.001 with 200,000,000 shares authorized. The Company also has 5,000,000 authorized shares of preferred stock with a par value of $0.0001.

 

During the year ended December 31, 2015, the Company sold 4,000,000 shares at $0.05 per share for total proceeds of $200,000.   No warrants were issued with the shares.

 

On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate 6,700,000 shares of common stock.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance. The Company sold 5,700,000 shares of common stock at a rate of $0.05 for $235,000 in cash and $50,000 in a Stock subscription receivable.  In addition, Mr. Jones and Mr. Collard exchanged $50,000 of their notes outstanding (see Note 4) into 1,000,000 shares of common stock at the same rate of $0.05 per share.  There were no warrants issued with the shares.

 

On May 12, 2016 the Company extended the expiration date of five million (5,015,000) outstanding warrants issued during 2014 for an additional 6 months (November 24, 2016).  The Company also reduced the exercise price from $0.15 to $0.10.

 

XML 24 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
7. Stock Options
6 Months Ended
Jun. 30, 2016
Notes  
7. Stock Options

7.               Stock Options

 

The Company has established a Stock Option Incentive Plan (“SIP”) to authorize the granting of stock options up to 10 percent of the total number of issued and outstanding shares of common stock to employees, directors and consultants. Upon exercise of options, shares are issued from the available authorized shares of the Company.

 

Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant. 

 

On February 6, 2015, the Board approved a grant of one million options to purchase shares of common stock under the SIP to Directors, Executive Officers and other non-employees’ consultants. The granted options have been valued and recorded using the Black Scholes model. The Black Scholes calculation on the 1,000,000 options that were issued was a fair value of $0.06 per option ($60,000 in total). The SIP was approved by shareholder vote during the January 20, 2015 annual shareholder meeting. The options were fully vested upon grant and recognized as compensation expense for the year ended December 31, 2015.    No options were granted during the six months ended June 30, 2016.

 

The fair value of each option award was estimated on the date of the grant using the assumptions noted in the following table:

 

 

Stock price

$           0.06

Exercise price

$           0.06

Expected volatility

230.09%

Expected dividends

-

Expected terms (in years)

5.0

Risk-free rate

1.31%

 

 

 

The following is a summary of the Company’s options issued under the Stock Option Incentive Plan:

 

 

 

Shares

Weighted Average Exercise Price

Outstanding at December 31, 2013 and 2014

2,990,000

$             0.20

    Granted in 2015

1,000,000

0.06

Outstanding and exercisable at December 31, 2015 and June 30, 2016

3,990,000

$             0.17

 

 

The average remaining contractual term of the options outstanding and exercisable at June 30, 2016 was 1.35 years.  As of June 30, 2016 options outstanding and exercisable had no aggregate intrinsic value.

 

XML 25 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
8. Subsequent Events
6 Months Ended
Jun. 30, 2016
Notes  
8. Subsequent Events

8.     Subsequent Events

On July 2, 2016 Company has granted 2,775,000 stock options to directors, officers, employees and consultants of the Company and its affiliates to purchase common shares in the capital stock of the Company. The options are exercisable on or before July 20, 2021 at a price of $0.10 per share. As of August 4, 2016, the Company has 4,765,000 outstanding stock options that represent 9.4% of the issued and outstanding shares of common stock.

In July 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.

XML 26 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations: Investments in Joint Venture (Policies)
6 Months Ended
Jun. 30, 2016
Policies  
Investments in Joint Venture

Investments in Joint Venture

 

The Company’s accounting policy for joint ventures is as follows:

 

1.                   The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are carried at cost. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.

 

2.                   If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.

 

3.                   In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is typically consolidated with the presentation of non-controlling interest.  In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee.   However, see Note 3 regarding the Company’s accounting for its investment in Owyhee Gold Trust, LLC,

 

XML 27 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations: Recent Accounting Pronouncements (Policies)
6 Months Ended
Jun. 30, 2016
Policies  
Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

XML 28 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations: Net Income (loss) Per Share (Policies)
6 Months Ended
Jun. 30, 2016
Policies  
Net Income (loss) Per Share

Net Income (Loss) Per Share

 

The Company is required to have dual presentation of basic earnings per share (“EPS”) and diluted EPS.  Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including options and warrants to purchase the Company’s common stock.  As of June 30, 2016 and 2015, the remaining potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:

 

 

For the period ended June 30,

2016

2015

Stock options

3,990,000

3,990,000

Warrants

5,015,000

5,015,000

    Total possible dilution

9,005,000

9,005,000

 

 

XML 29 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations: Net Income (loss) Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)
6 Months Ended
Jun. 30, 2016
Tables/Schedules  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

 

For the period ended June 30,

2016

2015

Stock options

3,990,000

3,990,000

Warrants

5,015,000

5,015,000

    Total possible dilution

9,005,000

9,005,000

XML 30 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
7. Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables)
6 Months Ended
Jun. 30, 2016
Tables/Schedules  
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

 

Stock price

$           0.06

Exercise price

$           0.06

Expected volatility

230.09%

Expected dividends

-

Expected terms (in years)

5.0

Risk-free rate

1.31%

 

XML 31 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
7. Stock Options: Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value (Tables)
6 Months Ended
Jun. 30, 2016
Tables/Schedules  
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value

 

 

Shares

Weighted Average Exercise Price

Outstanding at December 31, 2013 and 2014

2,990,000

$             0.20

    Granted in 2015

1,000,000

0.06

Outstanding and exercisable at December 31, 2015 and June 30, 2016

3,990,000

$             0.17

XML 32 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations (Details)
6 Months Ended
Jun. 30, 2016
Details  
Entity Incorporation, Date of Incorporation Nov. 09, 1935
Basis of Accounting

The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to the Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six month period ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. For further information, refer to the financial statements and the footnotes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015.

Substantial Doubt about Going Concern

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include financing the Company’s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners.

 

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Substantial Doubt about Going Concern, Conditions or Events The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at June 30, 2016 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements.
Substantial Doubt about Going Concern, Management's Evaluation The Company’s plans for the long-term return to and continuation as a going concern include financing the Company’s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties.
XML 33 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
1. Summary of Significant Accounting Policies and Business Operations: Net Income (loss) Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - USD ($)
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Details    
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units $ 3,990,000 $ 3,990,000
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants 5,015,000 5,015,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 9,005,000 9,005,000
XML 34 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
2. Commitments (Details) - USD ($)
13 Months Ended 27 Months Ended
Oct. 31, 2016
Mar. 21, 2013
Details    
Minimum expenditure through date $ 150,000 $ 150,000
XML 35 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
3. South Mountain Project LLC (Details) - USD ($)
6 Months Ended
Nov. 09, 2012
Jun. 30, 2016
Details    
Contribution of Property $ 479,477  
Legal Matters and Contingencies  

On January 27, 2015, SMMI became manager of the OGT under the terms of the November 8, 2012 operating agreement, because ISGC II had effectively resigned under the Agreement. This appointment as Manager was further ratified by a Judge`s Court Order on March 1, 2016.  Beginning in January 2015, SMMI paid OGT’s expenses to ensure ongoing operations at the site. For the six-month period ending June 30, 2016 and for the year ended December 31, 2015, the Company incurred expenses of $300,332 and $693,592, respectively relating to OGT operations. The Company has recognized these expenses in these consolidated financial statements because, due to the dispute discussed below, it is not clear as to whether SMMI will be reimbursed by OGT.  At June 30, 2016 and December 31, 2015, accrued payroll for services performed relating to the operation of OGT was $427,000 and $274,000, respectively.  The accrued payroll was earned by three of the Company’s officers whose balances at June 30, 2016 are as follows:  Eric Jones, President and Chief Executive Officer - $170,000, James Collord, Vice President and Chief Operating Officer - $170,000, and Larry Thackery, Chief Financial Officer - $87,000.  None of the compensation has been paid.  

 

SMMI maintains that ISGC II did not earn its ownership units, and resigned under the terms of the Operating Agreement, causing SMMI to become manager. ISGC II did not agree that SMMI became manager of OGT in early 2015. However, that disagreement was corrected on March 1, 2016, when a Judge`s Order stipulated that SMMI was in fact Manager.

 

In December 2015, the Company received service of a Complaint that had been filed but not served on June 22, 2015, namely Idaho State Gold Co. II, LLC, an Idaho limited liability company; and, Owyhee Gold Territory, LLC, an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation, et al.,.  At December 31, 2015, the status of the lawsuit was pending and management is unable to predict the outcome due to the early stages of the litigation.   The probability of loss is unknown and the financial statements do not include any adjustment related to litigation.   

 

On January 11, 2016, the Company answered the complaint it received in December 2015.   In its response, the Company asserts that:

 

·         ISGC II failed to make its initial contribution, including earn in requirements described by the OGT agreement;

·         ISGC II failed to provide accounting consistent with generally accepted accounting practices, along with an independent audit required for issuance of ownership units; and

·         Significant damages are payable by ISGC II to the Company.

 

On February 16, 2016, ISGC II filed a motion for a more definitive statement asserting that the Company’s response was not specific enough.

 

On March 1, 2016, the Company was awarded a Court Order approving defined stipulations and dismissing of certain portions of a December Complaint.  The Court Order acknowledged and confirmed the Company’s assertions, and stipulated that:

 

a.    As of March 1, 2016, the Company’s wholly owned subsidiary, SMMI, is the manager of OGT for all lawful purposes and shall have the right to advance the project and the interests of OGT and the South Mountain Mine Project according to the terms of OGT’s November 8, 2012, Operating Agreement and the Parties November 8, 2012, Member Agreement; and

b.    OGT is the owner of the real property described in the Operating Agreement signed by both parties November 8, 2012, and confirmed by certain Quitclaim Deed and filed on October 31, 2013, without any without any claim or encumbrance by Defendants; and

c.     ISGC II acknowledges that a Statement of Authority should be filed with the Idaho Secretary of State that identifies SMMI as Manager of OGT effective the date of this Stipulation; and

d.    Because of conflicts of interest, OGT, and the Company’s subsidiaries THMG and THMR were dismissed from the litigation; and

e.     ISGC II shall not sell or cause to be sold any of the equipment and assets described in the ISGC II financial reports without prior notice and the concurrence of OGT, with SMMI acting as manager of OGT; and

f.     ISGC II’s motion for a more definite statement is withdrawn.

 

Because of the Court Order above, ISGC II was required to withdraw their original Complaint. ISGC II filed an amended Complaint on March 14, 2016 in which it claims it is entitled to vesting of Units in OGT based solely upon the funds they spent towards the South Mountain mining project, or based upon an equitable claim.   The Company deems their claims erroneous and without merit, and that funds were spent outside of compliance with the Operating Agreement, and without proper controls or accounting. The Company will aggressively and vigorously defend against this lawsuit, and is confident of a positive legal outcome for the Company in Idaho Court. 

 

At December 31, 2015 and June 30, 2016, because of the uncertainty as to the status of OGT and the share allocation between SMMI and OGT, the Company has continued to account for its investment at cost and has recognized the expenses incurred in 2015 and the first six months of 2016 for the operation of OGT.

XML 36 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
4. Related Party Notes Payable (Details)
6 Months Ended
Jun. 30, 2016
Details  
Debt Instrument, Description On December 9, 2014 the Company executed two promissory notes payable to directors, Eric Jones and Jim Collard. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier. The original convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount. On July 1, 2015, these notes were extended to December 31, 2015. As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month. The extension contained a conversion feature. The note holder can convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015. During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively. On the due date of the notes, December 31, 2015, these notes were extended to January 31, 2016. In connection with this extension, the accrued interest balance of $30,000 was added to the principal balance resulting in a new outstanding principal balance of $171,076. Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated. On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock. In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each from their related notes payables for a total of 1 million shares (see Note 6).
Debt Instrument, Increase (Decrease) for Period, Description During the six months ended June 30, 2016, the Company paid $7,500 on Mr. Jones’ outstanding note balance. At June 30, 2016, the notes payable balances were $51,769 and $61,808 for Mr. Jones and Mr. Collord, respectively. Also at June 30, 2016, accrued interest payable balances were $3,403 and $3,949 for Mr. Jones and Mr. Collord, respectively.
XML 37 R25.htm IDEA: XBRL DOCUMENT v3.5.0.2
5. Related Party Transactions (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Details    
Legal fees paid to related party $ 54,000 $ 123,108
Other Accrued Liabilities $ 145,178 $ 123,038
XML 38 R26.htm IDEA: XBRL DOCUMENT v3.5.0.2
6. Stockholders' Equity (Details) - USD ($)
6 Months Ended
Jan. 18, 2016
Jun. 30, 2016
Private offering 2015    
Stock Issued During Period, Shares, New Issues   4,000,000
Sale of Stock, Price Per Share   $ 0.05
Stock Issued During Period, Shares, New Issues   4,000,000
Sale of Stock, Price Per Share   $ 0.05
Private offering    
Stock Issued During Period, Shares, New Issues 5,700,000  
Sale of Stock, Price Per Share $ 0.05  
Aggregate shares issued in Private Offering   6,700,000
Stock Issued During Period, Shares, New Issues 5,700,000  
Common Stock, Value, Subscriptions $ 50,000  
Debt Conversion, Converted Instrument, Amount $ 50,000  
Debt Conversion, Converted Instrument, Shares Issued 1,000,000  
Sale of Stock, Price Per Share $ 0.05  
XML 39 R27.htm IDEA: XBRL DOCUMENT v3.5.0.2
7. Stock Options (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2014
Feb. 06, 2015
Details          
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number         1,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price     $ 0.06 $ 0.06  
Options issued for services   $ 60,000 $ 60,000    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term 1 year 4 months 6 days        
XML 40 R28.htm IDEA: XBRL DOCUMENT v3.5.0.2
7. Stock Options: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares
12 Months Ended
Dec. 31, 2015
Feb. 06, 2015
Details    
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price   $ 0.06
Fair Value Assumptions, Exercise Price   $ 0.06
Fair Value Assumptions, Expected Volatility Rate 230.09%  
Fair Value Assumptions, Expected Term 5 years  
Fair Value Assumptions, Risk Free Interest Rate 1.31%  
XML 41 R29.htm IDEA: XBRL DOCUMENT v3.5.0.2
7. Stock Options: Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value (Details) - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Dec. 31, 2014
Details      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 3,990,000   2,990,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price     $ 0.20
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures   1,000,000  
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price   $ 0.06 $ 0.06
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value $ 0.17    
XML 42 R30.htm IDEA: XBRL DOCUMENT v3.5.0.2
8. Subsequent Events (Details)
6 Months Ended
Jun. 30, 2016
Details  
Subsequent Event, Description On July 2, 2016 Company has granted 2,775,000 stock options to directors, officers, employees and consultants of the Company and its affiliates to purchase common shares in the capital stock of the Company. The options are exercisable on or before July 20, 2021 at a price of $0.10 per share. As of August 4, 2016, the Company has 4,765,000 outstanding stock options that represent 9.4% of the issued and outstanding shares of common stock. In July 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 610,000 warrants for shares of common stock at a price of $0.10 per share. There was no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.
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