NOTE 6 - NOTES PAYABLE

Notes payable at June 30, 2013 and December 31, 2012 consist of the following:

	June 30,			December 31,
	2013			2012
	(unaudited)
Note payable for mining equipment, payable $5,556 monthly, including interest (a)	$	73,420		$	97,769
Note payable for mining equipment, payable $950 monthly, including interest (b)		27,549			31,565
Note payable for mining equipment, payable $6,060 monthly, including interest (c)		110,033			142,840
Note payable for mining equipment, payable $7,409 monthly, including interest (d)		-0-			10,130
Note payable for mining equipment, payable $5,000 monthly, including interest (d)		24,660			53,517
Note payable for mine site vehicle, payable $628 monthly, including interest (e)		32,046			35,816
Note payable for mining equipment, payable $5,000 monthly, including interest (f)		39,187			64,708
Note payable for mining equipment, payable $2,250 monthly, including interest (g)		21,943			32,192
Note payable to an insurance company, payable $16,604 monthly, including interest (h)		-0-			98,714
Note payable to an insurance company, payable $4,447 monthly, including interest (i)		4,430			30,645
		333,268			597,896
Less: Current Portion		(242,785	)		(413,470	)
Notes Payable, Long-Term Portion	$	90,483		$	184,426

(a)

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

(b)

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

(c)

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

(d)

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 are collateralized by the mining equipment with payments of $ 7,409 and $5,000 for 4 and 15 months, respectively

(e)

On September 20, 2012, the Company purchased a vehicle for the mine site for $37,701 by issuing a note with an interest rate of 0%. The note is collateralized by the vehicle with payments of $628 for 60 months, which started on October 20, 2012

(f)

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

(g)

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

(h)

The Company signed a note payable with 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 in June 2013.

(i)

The Company signed a note payable with an insurance company dated October 17, 2012 for liability insurance, due in monthly installments, including interest at 4.732%. The note will mature in July 2013

The following is a schedule of the principal maturities for the next five years and the total thereafter on these notes as of June 30, 2013:

July 2013 – June 2014		242,785
July 2014 – June 2015		64,487
July 2015 – June 2016		16,571
July 2016 – June 2017		7,540
July 2017 - June 2018		1,885
Thereafter		--
Total Notes Payable	$	333,268

During the three and six months ending June 30, 2013, the Company's interest payments totaled $7,137 and $13,624, respectively.