NOTES AND LEASES PAYABLE

12 Months Ended

Dec. 31, 2012

NOTES AND LEASES PAYABLE [Abstract]

NOTES AND LEASES PAYABLE

NOTE 7 - NOTES AND LEASES PAYABLE

Notes payable at December 31, 2012 and 2011 consist of the following:

	December 31, 2012			December 31, 2011
Note payable to an insurance company, payable $ 15,965 monthly, including interest (a)	$	--		$	110,648
Note payable for mining equipment, payable $5,556 monthly, including interest (b)		97,769			152,496
Note payable for mining equipment, payable $950 monthly, including interest (c)		31,565			--
Note payable for mining equipment, payable $6,060 monthly, including interest (d)		142,840			--
Note payable for mining equipment, payable $7,409 monthly, including interest (e)		10,130			--
Note payable for mining equipment, payable $5,000 monthly, including interest (e)		53,517			--
Note payable for mine site vehicle, payable $628 monthly, including interest (f)		35,816			--
Note payable for mining equipment, payable $5,000 monthly, including interest (g)		64,708			--
Note payable for mining equipment, payable $1,632 monthly, including interest (h)		32,192			--
Note payable to an insurance company, payable $ 16,604 monthly, including interest (i)		98,714			--
Note payable to an insurance company, payable $ 4,447 monthly, including interest (j)		30,645			--
		597,896			263,144
Less: Current Portion		(413,470	)		(165,375	)
Note payable, long-term portion	$	184,426		$	97,769

(a) The Company issued a note payable to an insurance company dated October 17, 2011 for directors' and officers' insurance, due in monthly installments, including interest at 3%. The note matured in July 2012.

(b) On July 7, 2011 the Company purchased mining equipment for $198,838 by issuing a note with an implicit interest rate of 9.34%. The note is collateralized by the mining equipment with payments of $5,556 for 36 months, which started on August 15, 2011.

(c) On April 17, 2012 the Company purchased mining equipment for $40,565 by issuing a note with an effective interest rate of 11.279%. The note is collateralized by the mining equipment with payments of $950 for 48 months, which started on May 1, 2012.

(d) On July 23, 2012 the Company purchased mining equipment for $169,500 by issuing a note with an interest rate of 5.5%. The note is collateralized by the mining equipment with payments of $6,060 for 30 months, which started on August 25, 2012.

(e) On July 19, 2012 the Company purchased two pieces of mining equipment that had been leased for $39,042 and $79,735, respectively by issuing notes with an implicit interest rate of 5.5% and is collateralized by the mining equipment with payments of $7,409 and $5,000 for four months and fifteen months, respectively.

(f) On September 20, 2012 the Company purchased a vehicle for the mine site that had been financed for $37,701. It is collateralized by the vehicle with payments of $628 for 60 months, which started on October 20, 2012.

(g) On November 16, 2012, the Company purchased a piece of mining equipment that had been leased for $67,960 by issuing a note with an effective interest rate of 5.5%. The note is collateralized by the mining equipment with payments of $3,518 for three months, then $5,000 for twelve months.

(h) On November 16, 2012, the Company purchased a piece of mining equipment that had been leased for $33,748 by issuing a note with an effective interest rate of 5.5%. The note is collateralized by the mining equipment with payments of $1,632 for five months, then $2,250 for twelve months.

(i) The Company issued a note payable to an insurance company dated October 17, 2012 for directors' and officers' insurance, due in monthly installments, including interest at 3.15%. The note will mature on June 2013.

(j) The Company issued a note payable to an insurance company dated October 17, 2012 for liability insurance, due in monthly installments, including interest at 4.732%. The note will mature on July 2013.

The following is a schedule of principal maturities for the next five years on these notes as of December 31, 2012:

January 2013 – December 2013	$	413,470
January 2014 – December 2014		143,600
January 2015 – December 2015		23,916
January 2016 – December 2016		11,254
January 2017 – December 2017		5,656
Total Notes Payable	$	597,896

During the years ending December 31, 2012, 2011 and 2010, the Company's interest payments related to notes payables totaled $18,206 and $58,029, and $9,648 respectively.