9. Income Taxes

12 Months Ended

Dec. 31, 2016

Notes

9. Income Taxes

9.     Income Taxes

The Company did not recognize a tax provision or benefit for the years ended December 31, 2016 and 2015 due to ongoing net losses.  At December 31, 2016 and 2015, the Company had net deferred tax assets which were fully reserved by valuation allowances due to the likelihood of expiration of these deferred tax benefits.  The net deferred tax assets were calculated based on an expected blended future tax rate of 3398% for federal and Idaho state purposes.  Significant components of net deferred tax assets at December 31, 2016 and 2015 are as follows:

	2016	2015
Deferred tax assets:
Net operating loss carryforwards	$         2,688,000	$         2,304,000
Share-based compensation	64,000	185,000
Deferred salaries	216,000	-
Exploration costs	116,800	144,000
	3,084,800	2,633,000
Deferred tax liabilities:
Investment in OGT LLC	(250,000)	(197,000)
Net deferred tax assets	2,834,800	2,436,000
Less valuation allowance	(2,834,800)	(2,436,000)
Net deferred tax asset	$                       0	$                       0

As of December 31, 2016 and 2015, the Company has approximately $6.6 million and $5.9 million, respectively, of federal and state net operating loss carryforwards that expire in 2028 through 2036. 

The income tax benefit shown in the financial statements for the years ended December 31, 2016 and 2015 differs from the federal statutory rate as follows:

	2016		2015
(Provision) benefit at statutory rates	363,400	35.0%	$     351,000	35.0%
State taxes	31,200	3.0%	30,000	3.0%
Financing related adjustments			(31,000)	3.1%
Miscellaneous permanent differences	4,200	0.4%	-
Adjustment to valuation allowance due to expiration of stock options	(187,500)	(18.1)	-	-
Increase in valuation allowance for increase in net operating losses	(211,300)	(20.3)	(350,000)	34.9%
Total	$                 0	- %	$                 0	-  %

The Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns and found no positions that would require a liability for uncertain income tax benefits to be recognized.  The Company is subject to possible tax examinations for the years 2013 through 2016.  Prior year tax attributes could be adjusted by taxing authorities.  If applicable, the Company will deduct interest and penalties as interest expense on the financial statements.