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Note 7 - Notes Payable

12 Months Ended

Dec. 31, 2014

NOTE 7 - NOTES PAYABLE

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

	December 31,
	2014			2013

Note payable for mining equipment, payable $5,556 monthly, including interest (a)	$	--		$	42,927
Note payable for mining equipment, payable $950 monthly, including interest (b)		14,057			23,302
Note payable for mining equipment, payable $6,060 monthly, including interest (c)		6,033			76,313
Note payable for lab equipment, payable $9,122 monthly, including interest (d)		18,246			--
Note payable for mining equipment, payable $1,339 monthly, including interest (e)		55,720			--
Note payable for mine site vehicle, payable $628 monthly (f)		20,736			28,276
Note payable for mining equipment, payable $5,000 monthly, including interest (g)		--			9,932
Note payable for mining equipment, payable $2,250 monthly, including interest (h)		--			8,898
Note payable to an insurance company, payable $21,531monthly, including interest (i)		149,036			--
Note payable to an insurance company, payable $6,094 monthly, including interest (j)		42,211			--
Note payable to an insurance company, payable $4,447 monthly, including interest (k)		--			132,576
Note payable to an insurance company, payable $4,447 monthly, including interest (l)		--			29,767
		306,039			351,991
Less: Current Portion		(246,894	)		(311,165	)
Notes Payable, Long-Term Portion	$	59,145		$	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 April 16, 2014, the Company purchased lab equipment for $109,493 by depositing and issuing a non-interest bearing note in the amount of $91,229. The note is collateralized by the lab equipment with payments of $9,122 for ten months, which started in May 2014.

(e)

On October 31, 2014, the Company purchased mining equipment for $65,120 by depositing and issuing a note in the amount of $57,900 with an interest rate of 5.2%. The note is collateralized by the mining equipment with payments of $1,339 for 48 months, which started on November 30, 2014.

(f)

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.

(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 signed a note payable with an insurance company dated October 31, 2014 for directors’ and officers’ insurance, due in monthly installments, including interest at 3.15%. The note will mature on July 2015.

(j)

The Company signed a note payable with an insurance company dated October 31, 2014 for liability insurance, due in monthly installments, including interest at 3.15%. The note will mature on July 2015.

(k)

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 matured in September 2013 and was repaid.

(l)

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 matured in July 2013 and was repaid.

The following is a schedule of the principal maturities on these notes for the next four years:

2015	$	246,894
2016		25,457
2017		20,615
2018		13,073
Total Notes Payable	$	306,039

During the 2014 and 2013, the Company's interest payments totaled $10,460 and $23,180, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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