NOTE 7 - NOTES PAYABLE

Notes payable at March 31, 2014 and December 31, 2013 consist of the following:

	March 31,			December 31,
	2014			2013

Note payable for mining equipment, payable $5,556 monthly, including interest (a)	$	27,141		$	42,927
Note payable for mining equipment, payable $950 monthly, including interest (b)		21,087			23,302
Note payable for mining equipment, payable $6,060 monthly, including interest (c)		59,102			76,313
Note payable for mine site vehicle, payable $628 monthly (d)		26,391			28,276
Note payable for mining equipment, payable $5,000 monthly, including interest (e)		-0-			9,932
Note payable for mining equipment, payable $1,632 monthly, including interest (f)		2,240			8,898
Note payable to an insurance company, payable $19,139 monthly, including interest (g)		76,055			132,576
Note payable to an insurance company, payable $4,297 monthly, including interest (h)		17,077			29,767
		229,093			351,991
Less: Current Portion		(198,663	)		(311,165	)
Notes Payable, Long-Term Portion	$	30,430		$	40,826

(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 September 20, 2012, the Company purchased a vehicle for the mine site for $37,701 by issuing a non-interest bearing note. The note is collateralized by the vehicle with payments of $628 for 60 months, which started on October 20, 2012.

(e)

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 was collateralized by the mining equipment with payments of $3,518 for three months, then $5,000 for twelve months.

(f)

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.

(g)

The Company signed a note payable with an insurance company dated October 17, 2013 for directors’ and officers’ insurance, due in monthly installments, including interest at 3.15%. The note will mature on July 2014.

(h)

The Company signed a note payable with an insurance company dated October 21, 2013 for liability insurance, due in monthly installments, including interest at 3.15%. The note will mature on July 2014.

The following is a schedule of the principal maturities on these notes as of March 31, 2014:

April 2014- March 2015	$	198,663
April 2015- March 2016		18,178
April 2016- March 2017		8,482
April 2017- March 2018		3,770
Total Notes Payable	$	229,093

During the three months ended March 31, 2014 and 2013, the Company's interest payments related to notes payables totaled $3,745 and $6,487 respectively.