Shoshone Silver/Gold Mining Co - FORM 10-K

Attached files

file	filename
EX-32.1 - CERTIFICATION - Shoshone Silver/Gold Mining Co	exhibit32-1.htm
EX-32.2 - CERTIFICATION - Shoshone Silver/Gold Mining Co	exhibit32-2.htm
EX-31.2 - CERTIFICATION - Shoshone Silver/Gold Mining Co	exhibit31-2.htm
EX-99.16 - MAP OF CAMP PROJECT CLAIMS - Shoshone Silver/Gold Mining Co	exhibit99-16.htm
EX-10.10 - CAMP PROJECT LEASE - Shoshone Silver/Gold Mining Co	exhibit10-10.htm
EX-31.1 - CERTIFICATION - Shoshone Silver/Gold Mining Co	exhibit31-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _________

Commission file number 000-31184

SHOSHONE SILVER MINING COMPANY
(Name of registrant in its charter)

Idaho	82-0304993
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.

3714 W Industrial Loop., Coeur d’Alene, ID	83815
(Address of principal executive offices)	(Zip Code

Issuer’s telephone number: (208) 664-0620

Securities registered under Section 12(b) of the Exchange Act:

Title of each class	Name of each exchange on which registered
None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.10
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [ ] No [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on March 31, 2010, the last business day of the registrant’s most recently completed second quarter, based on the last reported trading price of the registrant’s common stock on the Over the Counter Bulletin Board was $6,130,656.

There were 43,175,037 shares of the registrant’s $0.10 par value common stock outstanding on December 20, 2010.

FORM 10-K
For the Fiscal Year Ended September 30, 2010

TABLE OF CONTENTS

Page #

PART I	4

Item 1. Business	4

Item 1A. Risk Factors	27

Item 1B. Unresolved Staff Comments	27

Item 2. Properties	28

Item 3. Legal Proceedings	28

PART II	29

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	29

Item 6. Selected Financial Data	30

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 7A. Quantitative and Qualitative Disclosures About Market Risk	35

Item 8. Consolidated Financial Statements and Supplementary Data	36

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	59

Item 9A(T). Controls and Procedures	59

Item 9B. Other Information	60

PART III	61

Item 10. Directors and Executive Officers of the Registrant	61

Item 11. Executive Compensation	61

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	61

Item 13. Certain Relationships and Related Transactions and Director Independence	62

Item 14. Principal Accounting Fees and Services	62

PART IV	63

Part 15. Exhibits, Financial Statement Schedules	63

PART I

ITEM 1. BUSINESS

As used in this registration statement, "Shoshone Mining," "Shoshone," "our Company," "the Company,” "we," and "our" refer to Shoshone Silver Mining Company.

Overview

Shoshone Silver Mining Company is an Idaho corporation founded as Sunrise Mining Company on August 4, 1969. We subsequently changed our name to Shoshone Silver Mining Company on January 22. 1970. Shoshone was formed to explore, develop and produce precious metals with a focus on northern Idaho and Canada. In the late 1990's, we were unable to productively utilize our Lakeview (Idaho) property and we elected to expand our exploration activities throughout Idaho and also increasingly in other western states and Mexico.

We are an exploration stage company, and our activities have been limited to exploring and acquiring rights to explore properties which we believe are prospective for silver, gold, platinum group and base metals along with uranium. We have identified and commenced prospecting efforts in several areas in Idaho, Montana and Arizona. There can be no assurance that any of our properties contain a commercially viable ore body or reserves. None of our properties are in production. The limited revenues we are reporting is from the processing of previously stockpiled mineralized material.

EXPLORATION PROPERTIES

			Claims
Project	Location	Acres	Patented	Unpatented

Idaho Lakeview District	Bonner County, Idaho
Idaho Lakeview & Keep Cool		780	15	24
Millsite		13
Drumheller		111	6
Auxer		40	-	2
Talache		40	-	2
Subtotal		984	21	28

Silver Valley	Shoshone County, Idaho
Shoshone		96	5	-
Bullion		138	7	-
Camp Project		630	35
Subtotal		864	47	-

Central Idaho
Rescue		1,720	-	84
Iola		70	5	-
Silver King		174	12	-
Kimberly		480	-	24
Subtotal		2,444	17	108

North Idaho	Boundary County, Idaho
Montgomery		500	-	25
Regal		80	-	4
		580	-	29

Montana	Montana
Stillwater Extension Claims	Stillwater County	200	-	10
Princeton Gulch Group	Granite County	120	-	6
Subtotal		320	-	16

Arizona Gold	Arizona
Western Gold	Mohave County	240	-	13
Gold Road	Mohave County	320	-	16
Cerro Colorado	Pima County	60	-	3
Subtotal		620	-	32

Washington
Shaft Claims		380	-	19

Mexico Properties	Mexico
Other Mexican Properties	State of Sonora, Mexico	N/A	N/A	N/A

Idaho Lakeview District Holdings

We have a group of patented and unpatented properties located in Bonner County near the Shoshone milling facility commonly referred to as the Idaho Lakeview District Properties. This group includes the Idaho Lakeview, Weber, Keep Cool, Auxer and Talache properties.

Conjecture

During 2004, we entered into a 25-year lease agreement for 6 unpatented lode mining claims and 6 patented lode mining claims in Bonner County. Yearly lease payments on the property were 100,000 shares of common stock. In April 2010, we cancelled the lease agreement and, under the terms of the agreement, paid to the lessor 50,000 shares of our common stock (valued at $9,000) and a royalty fee $259.

Details of the original lease agreement may be found in the exhibit 10.2 which was filed as an exhibit to our Annual Report on Form 10-KSB filed with the Commission on August 3, 2006.

Idaho Lakeview, Keep Cool and Weber

The Idaho Lakeview, Weber and Keep Cool groups are located contiguously around an area of Bonner County near our Idaho Lakeview Mill.

Location and Access:

The claims are in Sections 15, 22, 26, 27, 28, 29, 32, 33, 34, and 35 of Township 53 North, Range 1 West. From the city of Coeur d'Alene, Idaho, the claims can be reached via 36 miles of paved and well-graded gravel roads. Approximately 16 miles north of Coeur d'Alene near the town of Athol on U.S. Highway 95 is the intersection with Bunco Road, which becomes U.S. Forest Service Road #332. Bunco Road traverses the Lakeview Mining District 18-22 miles from the highway. Many secondary roads lead from Bunco Road to the mines and prospects of the Lakeview Mining District. Commercial electricity is available on the property. Water is supplied via wells and through water rights to a nearby creek.

A map of the Idaho Lakeview, Keep Cool and Weber properties is contained in Exhibit 99.1 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The Idaho Lakeview and Keep Cool Groups comprise 9 patented and 14 unpatented lode mining claims. The Weber Group is comprised of 6 patented and 10 unpatented lode mining claims. The Idaho Lakeview Millsite consists of a mill and water treatment facility on 12.5 patented acres.

In order to retain title to the Idaho Lakeview, Weber and Keep Cool, we must pay annually assessed property taxes to Bonner County, Idaho on the 15 patented claims within the group and annual Bureau of Land Management Maintenance Fees totaling $3,360 ($140 per claim, for the 24 unpatented claims)

Geology:

These properties lie within the Lakeview Mining District. The Lakeview mining district is predominantly underlain by Precambrian metasedimentary rocks of the Belt Super-group represented by the Wallace Formation. The Wallace formation consists of black or grey, very thinly laminated argillites and siltites containing interbedded blue-grey dolomite or limestone horizons. Total thickness of the Wallace formation is in excess of 5,000 ft.

The property currently is without known reserves.

Exploration History:

Initial discoveries of mineralization in the Lakeview District were made in 1888 near the site of the Weber Mine. Additional discoveries were made throughout the Pend Oreille Lake region and the Lakeview District was at that time included in the Pend Oreille Mining district, and early production records are unknown.

In 1924, the Venezwela Group of claims was taken over by the Hewer Mining Company and became what is now known as the Lakeview Mine. An internal shaft was eventually sunk to the 1,400 ft level and between 1923 and 1943 the Lakeview mine produced 24,500 tons of ore.

In 1962, Sunshine Mining Company signed an agreement with Idaho Lakeview Mines, the successor to Hewer Mining Company, and acquired a 50% interest in the Keep Cool and Idaho Lakeview mines. The combined properties became the Lakeview Consolidated Silver Mines, Inc.

Sunshine, in order to maintain its interest, conducted assessment work on the properties, including surface excavations, drill holes and underground work.

In 1978, a bulldozer trenching discovered another surface zone of mineralization 2,000 ft northeast of the Weber Pit. It exposed a vein 10-12 ft wide and 135 ft long. This vein was mined during the early 1980’s.

In 1987, we rehabilitated the Keep Cool Mine, and drove 200 ft of new workings towards a vein drilled by Sunshine Mining Company in 1970.

A limited amount of material was removed from the Weber Pit in the late 1970’s, early 1980’s. Exact quantities are unknown.

We conducted exploration drilling from the surface in 2008

Development Activities:

In 2008, we completed the refurbishment of the Lakeview Mill. This refurbishment included repairs and updates to the existing equipment and electrical infrastructure and installation of a new water management system. The mill has since been processing previously mined and stockpiled mineralized material. Concentrates from milling activities are being stored at the mill facility. During 2010, we entered into an agreement to sell silver concentrate produced at our Lakeview property to a smelter for refining. To date, from our test runs, we have generated revenues of $20,111 from the sale of concentrate to the smelter.

Exploration and Development Plans:

During 2008, we conducted trenching and sampling on a portion of the Weber Shear between the Weber and Keep Cool Mines. Also, during 2008, we conducted exploration drilling from the surface over a portion of the properties.

Production Plans:

We will continue milling previously mined and stockpiled mineralized materials in 2010 when snow no longer makes the roads impassable. Additionally, Shoshone plans to engage in limited surface mining in the Weber shear as it extends from the Weber to the Keep Cool on its patented ground provided initial drilling substantiates the continued mineralization of the shear at or near the surface.

Mineralized material that may be obtained from this mining activity will be processed at the Lakeview Mill. We will be stockpiling concentrates from milling at its facilities until a sufficient quantity of concentrates are held to make shipping and smelting economically advantageous. Planned production activities will continue while roads are passable by heavy equipment.

Impairment:

During 2006, we paid fees to make improvements to the land to be more accessible as well as usable. The total amount of $68,472 was capitalized.

We believe that, when compared to the market value of the property, the deferred costs of $334,690 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

Drumheller Group

We own 6 patented claims consisting of 111 acres which are adjoining and lying south of the Idaho Lakeview claims on a extension of the Hewer vein. We issued 109,141 shares of its common stock to acquire these claims in February 1984.

Auxer Group

The Auxer Mine is a formerly producing precious metal mine located in Bonner County, Idaho.

Location and Access:

The Auxer Mine property is located in Bonner County, Idaho, about 3.5 miles northeast of East Hope, Idaho and about 10 miles north of Clark Fork, Idaho within Sections 20, 29, Township 57 North, Range 02 East.

The property can be accessed by logging roads leading north from Clark Fork, Idaho along Lightning Creek for 11 miles; then by four miles of logging roads and mine access road to the headwaters of Wellington Creek. The property can also be accessed by five miles of gravel roads leading north from East Hope, Idaho along Strong Creek. The current electrical and water supply to the land are unknown.

A map showing the Auxer Property may be found in Exhibit 99.3 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The area covered by the Auxer claims is under Bureau of Land Management (BLM) jurisdiction. The Auxer property consists of 2 contiguous unpatented mining claims covering 40 acres. Title to the property is maintained by annual payment of BLM Maintenance Fees of $280. We have not made improvements to the property.

Geology:

The Auxer Mines area is located on the north slope of the Auxer Basin, a glacial cirque, at elevations that range from 5,200 to 6,000 feet above sea-level. Vegetation consists of dense stands of conifers, with areas of talus cover on the northwesterly portions of the claim area. Soil depth on the property ranges from bedrock exposure to roughly ten inches deep.

Argillaceous quartzites of the Pre-Cambrian Belt Series intruded by granodiorite underlie the claims. The Prichard formation is exposed in talus material along the northwesterly boundary of the claims.

There are two main gold bearing quartz veins, the Boston and Chicago Veins. The Boston Vein can be traced for several thousand feet on the surface. It is a 14-15 foot wide shear zone at the surface, but widens to 25 feet at a depth of 200 feet. The quartz vein contains gold, associated with the pyrite.

The Chicago Vein is located 500 feet south of the Boston Shaft and occurs within a shear zone parallel to the Boston Vein. The vein is of the same character as the Boston Vein, but has not been explored on the surface. A 40 inch wide channel sample was taken on the surface by John Plats in 1936, assaying 0.60 oz/t gold.

The property is currently without known reserves and the proposed program, as defined below, is exploratory in nature.

Exploration History:

E.U. Philbrick staked the main Auxer claims in 1905. In 1925, Auxer Gold Mines was organized, and by 1933 most of the Auxer claims were deeded to Auxer Gold Mines.

In 1968, Auxer Gold Mines was purchased by Spokane National Mines, Inc. In 1972, the property was sold to Idora Silver Mines, Inc. and later relinquished its interest. Ashington Mining Company staked two claims in 1999.

In September 2003, we acquired the property from Ashington Mining Company for $7,500.

Exploration Plans:

The following are recommended for the exploration of the Auxer claims:

Surface geological mapping of surface exposure of veins;
Geochemical sampling of surface and underground vein exposures;
Underground geological mapping of mine workings (if accessible);
Systematic sampling of underground vein exposures (if accessible); and
Location of surface and underground drill sites.

No timetable for exploration has been set and costs for the recommended exploration have not been determined.

Impairment:

e believe that, when compared to the market value of the property, the deferred costs of $7,500 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

Talache Group

Location and Access:

The Talache silver-gold property is located in Bonner County, in Sections 1 and 6, Township 55 North, Range 1 West. These holdings are located approximately 1 mile northwest of Talache Landing, and 12 miles southeast of Sandpoint, via U.S. Highway 95 and Mirror Lake Road. The current status of electric and water supply to the property are unknown.

A map showing the Talache Group may be found in Exhibit 99.4 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The property consists of 2 unpatented mining claims covering 40 acres of Bureau of Land Management (BLM) land. Title to the property is maintained by annual payment of BLM Maintenance Fees of $280. We have not improved the property.

Geology:

Steep slopes that are heavily timbered characterize the topography of the area. Altitudes vary from 2,060 feet on the shore of Pend Oreille Lake to more than 4,100 feet in the northwestern portion of the property. The property is dominated by coniferous forest, with large areas of open meadow grassland in areas where soil cover is too thin to support conifer trees.

The rocks exposed in the vicinity of the property consist of argillites, silites, and quartizes of the Precambrian Belt Super-group. In the vicinity of the Talache Group property, the rocks display an overall tendency to become less calcareous and more clastic with depth. The property is situated on the west limb of a syncline whose axis strikes nearly due north. Two prominent fracture directions are observed within the property boundaries. These include a set that strikes nearly north-south and dips from 80 degrees west to 45 degrees east and a set which strikes approximately east-west and dips from 45 degrees south to 45 degrees north. Most of the prominent mineralization in the area follows north-striking fractures.

Mineralization of economic significance occurs as veins contained in numerous faults and shear zones within the area. The veins occur as lenses and pipes that shoot within the faults and vary considerably in size, grade, and continuity. They improve in width and grade where they are cut and offset by east-west striking cross faults.

Exploration History:

The first claims were staked in the area in the early 1890’s. In 1922, the Talache Mine was developed and production was initiated and continued until late 1926. Although no accurate record exists of total production, it has been estimated that the Talache Mine produced approximately two million ounces of silver and some gold, lead, and copper. Zinc, although present, was not recovered. The operation may have ceased due to the decreasing silver price and the fact that the mineralized zone was found to extend off of the Talache property along strike.

In 1964, the Silver Butte Mining Co. was formed to explore the Talache area, and approximately 2,300 feet of drifting and cross-cutting and 2,400 feet of diamond drilling were carried out approximately 1 mile to the north of the current Talache Group Claims.

In 1969, Silver Butte and Imperial Silver leased the property to Cominco American, Inc. Cominco held the properties through 1971 and completed approximately 5,000 feet of diamond drilling. Subsequently all claims were dropped.

In 1999, two claims covering 40 acres were staked for Ashington Mining Corporation.

In 2003, we acquired the property from Ashington for $22,500.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration Plans:

The following are recommended actions for the Talache Property:

Rehabilitate the Talache 400 level portal;
Conduct systematic channel sampling of vein exposures on the Talache 400 level;
Underground geological mapping of the Talache 400 level;
Surface geological mapping to identify surface expression of faults and veins;
Surface sampling of vein and fault exposures to extend laterally the mineralization; and
Locate potential reverse circulation and diamond drill hole locations for surface drilling.

No timetable for exploration has been set and costs for the recommended exploration have not been determined.

Impairment:

We believe that, when compared to the market value of the property, the deferred costs of $22,500 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

Silver Valley Holdings

Shoshone has three holdings in Idaho’s Silver Valley: the Shoshone, Bullion and North Osburn Groups.

Shoshone Group

We have a group of patented lode claims commonly referred to as the Shoshone Group located contiguously around an area within the St. Joe Mining District in Shoshone County, Idaho.

Location and Access:

The claims are in Sections 13, 14, and 15 of Township 47 North, Range 5 East. From the city of Coeur d'Alene, Idaho, travel approximately 45 miles East on Interstate 90, to Exit # 63. Turn south onto Willow Creek Road. Travel south of Willow Creek Road for 1 mile. Several secondary roads access this property. Commercial power is available on Willow Creek Road. The current status of the water supply is unknown.

A map showing the Shoshone Group may be found in Exhibit 99.2 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The Shoshone Group consists of 5 patented lode claims totaling 96 acres in the St. Joe Mining District. Title to the property is maintained by payment of annually assessed property taxes to Shoshone County, Idaho. During 2010, we paid $61 in property taxes on this property. We have not made improvements to the property.

Geology:

The rocks in the claim group belong to the Precambrian lower Wallace formation, consisting of light-grey dolomitic quartzite inter-bedded with greenish-grey argillites. Ripple marks and mud cracks are visible on bedding surfaces. The rocks are intruded by Tertiary aged diabase dikes.

The claim group is located within a fault block bounded by the Osburn Fault to the north and the Placer Creek Fault to the south, and covers three vein structures known as the Champion, Helena and Link Veins.

The Champion Vein extends from the Springfield Mine to the Bullion Mine six miles to the east, passing through both the Shoshone and Bullion properties.

Exploration History:

The Shoshone Group is located in the St. Joe Mining District of eastern Shoshone County, along the Montana border. This property covers several prospect pits and other historic mine workings.

The Shoshone Group was the subject of considerable interest and speculation in the early 1980’s as Anaconda Minerals drilled the property. Surface outcrop, including a vein structure 7,000 feet long and up to 80 feet wide, along with “enormous geological anomalies” shown in soil and vegetation sampling by the USGS, led geologists to believe that substantial silver mineralization might be found at depth.

Anaconda drilled four exploratory holes near the property boundary shared with Stevens Peak Mining, in an effort to locate a site for deeper drilling. One of the holes was sufficiently encouraging to justify its continuation and was planned to extend to depths reaching 6,000 feet, targeting the Champion Vein, deep in the Revett formation. However, the planned hole was collared at just over 3,000 feet and although core samples confirmed earlier projections about geology and structure at depth, the program was never completed.

Bear Creek Mining Company leased the Shoshone Group in 1981. We conducted surface geological and geo-chemical surveying.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration Plans:

There are currently no plans to conduct exploration on our Shoshone properties.

Impairment:

The deferred costs of this property totaled $17,500, which was written-off in prior years as an exploration expense.

Bullion Group

We have a group of patented properties commonly referred to as the Bullion Group located contiguously within the St. Joe Mining District in eastern Shoshone County, Idaho.

Location and Access:

The claims are in Sections 20 and 21 of Township 47 North, Range 6 East. From the city of Coeur d'Alene, Idaho, travel approximately 50 miles east on Interstate 90, to Exit # 1 (TAFT Exit). Turn onto USFS Road 507, following it for 7 miles. The Bullion Group is accessed by newly cut logging roads from USFS Road 507. Current electrical and water supplies are unknown.

A map showing the Bullion Group may be found in Exhibit 99.2 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The Bullion Group consists of 7 patented lode claims totaling 138 acres. Title to the property is maintained by payment of annually assessed property taxes to Shoshone County, Idaho. During 2010, we paid $100 in property taxes on this property. We have not made improvements to the property.

Geology:

The rocks in the Bullion Group are the same geologic setting as for the Shoshone Group of claims belonging to the Precambrian lower Wallace formation.

The Bullion Group, as is the case of the Shoshone Group, is located within a fault block bounded by the Osburn Fault to the north and the Placer Creek Fault to the south, and covers three vein structures known as the Champion, Helena and Link Veins.

The Bullion Group covers the Bullion Mine workings located on the Champion Vein.

Exploration History:

The Bullion Group is located in the St. Joe Mining District of eastern Shoshone County, along the Montana Border. The two unpatented Bullion Group claims totaling 40 acres have been leased to Sterling Mining Company. Lease terms stipulate a 4 year exploration program commencing within five years of the lease date. Shoshone will receive 10% net profit from any mined minerals.

This lease agreement may be found in Exhibit 10.4 which was filed as an exhibit to our Annual Report on Form 10-KSB filed with the Commission on December 4, 2006.

Bear Creek Mining Company leased the Bullion Group in 1981. We conducted surface geological and geo-chemical surveying.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration Plans:

There are no plans to conduct exploration on the Shoshone’s Bullion Group until a due diligence study is completed.

Impairment:

This property was acquired as part of a settlement of a promissory note owed to us. The cost of the property was included as an exploration expense in a prior year.

Camp Project

We have leased from Merger Mines Corporation a group of patented properties commonly referred to as the Camp Project situated in the center of the “silver belt” of the Coeur d’Alene Mining District located in Shoshone County, Idaho. The Camp Project claims lie west of the Coeur and Galena Mines and east of the Sunshine Mine. The 15 year lease was obtained on December 14, 2009 for consideration of Shoshone common stock, a net smelter return, and annual advance royalty payments. A copy of the lease may be found in Exhibit 10.10.

Location and Access:

The Camp Project claim group is located in Shoshone County, Idaho in portions of sections 23, 24, 25, 26, Township 48 North, Range 3 East, Boise Meridian. East from Coeur d’Alene 43.4 miles on I-90 to the Osburn, Idaho exit #57. Turn right off the exit #57 ramp and proceed south approx. 0.02 miles to Yellowstone Ave. Turn right on Yellowstone Ave. and proceed approx. 1.75 miles to Terror Gulch Road. Turn left (south) on Terror Gulch Road approx. 0.02 miles, cross the railroad tracks and then proceed on approx. 0.03 miles to Mining Road. Follow Mining Road approx. 1 mile south to the location of the Camp Project Claims.

A map showing the Camp Project claim group may be found in Exhibit 99.16.

Land Status:

The Camp Project group consists of 35 patented lode claims totaling 630 acres in the Coeur d’Alene Mining District.

Geology:

Geology of the Camp Project group of claims is similar to that of the Silver Summit (ConSil) portion of the Sunshine Mine. Prominent fault structures that have hosted millions of ounces of silver productions elsewhere, such as the Polaris fault, the Silver Summit vein fault and the Chester fault all trend through the Camp Project claims area. The north limb of the Big Creek anticline, which hosts some of the major silver deposits in the district, also trends through the Camp Project area. Results of 13,200 feet of exploration geophysics performed during 2005 indicate a high chargeability/low-resistivity anomaly indicative of sulfide mineralization. This anomaly extended from near the surface to the maximum sensitivity of the test instrumentation in a generally east-west orientation and appears to increase in depth to the east. The Silver Summit, Chester, Wire Silver, “D”, and Chester-Polaris “Hook” Veins all originate in or extend into the Camp Project claims at depth.

Exploration History:

The claims have received little exploration work, even though numerous mineralized structures originate in or strike through the area. A future exploration program will include geochemical sampling, expansion of geophysics and/or surface diamond drilling.

North Osburn Group

We owned a group of 15 unpatented properties known as the North Osburn Group located within the Silver Valley in Shoshone County, Idaho. During fiscal 2010, we entered into the sale of these claims to an unrelated party. Since we had previously expensed the approximately $10,000 cost to acquire and maintain this property, the entire proceeds were accounted for as gain and presented under the caption “net gain on the sale of lode claim” on our Consolidated Statements of Operations.

Central Idaho Holdings

Warren District

Rescue Gold Mine

Location and Access:

From Coeur d’Alene, Idaho, drive south on State Highway 95 to New Meadows, Idaho. Turn onto State Highway 55; drive south on State Highway 55 to McCall, Idaho, you will enter the town of McCall on its northern edge. As you enter the city, there will be a highway sign on the right that says Warren Wagon Road and an arrow directing you to turn left. Turn left as directed and you will be on a paved road that runs along the north side of Payette Lake. This paved road extends into the Payette National Forest for a distance of 28 miles. At the end of the pavement is a U.S. F.S. sign with directions to Burgdorf, Secesh, Warren and several other areas of interest. The road to Warren is a wide, graveled road that is easy to follow. From the end of pavement to Warren is a distance of 17 miles plus. After traveling 16 miles, you will come to a wide area, with roads forking off in several directions. Stay on the better road and cross Warren Creek on a single lane concrete bridge.

As you enter Warren, the road makes a 90 degree left turn, goes one short block and makes a 90 degree right turn. Continue through Warren on this road. You will pass the Back Country Bed & Board on your left and very quickly pass a small saw mill on your right. Slow down, because as soon as you pass the little sawmill, you will leave the main road and turn right onto the access road to the mine. As you turn right, straight ahead you will see a gated bridge over Warren Creek, and a large 4’ x 8’ sign advertising Shoshone Silver Mining Company. Signs posted will direct you to the mill office.

A map of the Rescue Gold Mine is contained in Exhibit 99.14 which was filed as an exhibit to our Annual Report on Form 10-K filed with the Commission on January 10, 2010, File No.000-31184.

Land Status:

We hold 82 unpatented mining claims and 2 unpatented mill-site claims covering 1,720 acres in central Idaho. There is a 120 ton per day mill complete with a Knelson Gold Concentrator on the mill-site claims. There is a 43-101 Report which was completed in 2008.

Exploration and Development plans

During 2009, we conducted certain exploration activities before temporarily suspending work at this site. Work at the Rescue Mine resumed in June, 2010. The first priority has been to finish upgrading and renovating the mill. Once this mill work is completed, the mill will be started up and test runs on stockpiled ore will be conducted. The 200 level portal is scheduled to be reopened so that mine development can resume. This work will require some ground support, general clean up, the installation of a refuge station and the addition of air and water lines. A new decline portal has been planned to access the Rescue vein 1,000 feet east of the mill. Road work, site preparation and collaring off for the new decline portal should be accomplished this summer. This new decline portal will provide access to unmined portions of the Rescue vein and, when completed, will serve as the secondary escape-way from the mine as well as the exhaust ventilation drift for the mine ventilation system. At this time we are setting up to complete a seven-hole drilling program to establish our plan of operation.

Electrical work, which included installation of electrical panels, lights and power outlets, was completed in the large staging building, which was erected next to the Rescue Mill portal last summer to service operations in the Rescue Mine. The new building is now fully MSHA compliant. Additionally, a diesel generator was installed to provide power to the Rescue Mine as part of Shoshone’s ongoing preparations to bring the Rescue Mine and mill back into productions.

Impairment:

We believe that, when compared to the market value of the property, the deferred costs of $757,531 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

Iola Claims

We lease 5 patented mining claims in central Idaho covering 70 acres. A map of the Iola Claims are contained in Exhibit 99.14 which was filed as an exhibit to our Annual Report on Form 10-K filed with the Commission on January 10, 2010, File No.000-31184.

Silver King Claims

We lease 12 patented mining claims in central Idaho covering 174 acres. A map of the Silver King Claims are contained in Exhibit 99.14 which was filed as an exhibit to our Annual Report on Form 10-K filed with the Commission on January 10, 2010, File No.000-31184.

Marshall Mountain District

Kimberly Gold Mine

Location and Access:

Following the directions to reach the Rescue Mine, at the end of pavement will be a U.S.F.S. sign that directs you to turn left on a good gravel road to Burgdorf. Approximately 5 miles past Burgdorf will be a U.S.F.S. sign that directs you to turn right to reach the Kimberly Mine. This Forest Service road is best traveled in a high clearance vehicle and is identified on U.S.F.S. maps as road #318. After traveling 8 plus miles, a small sign on the right hand side of the road will say “Sherman Howe Mine”, turn right and stay on the main road and in ¾ of a mile you will be in the old Kimberly mine camp. As a warning, very few U.S.F.S. roads are identified with their numerical designation.

A map of the Kimberly Gold Mine is contained in Exhibit 99.14 which was filed as an exhibit to our Annual Report on Form 10-KSB filed with the Commission on January 10, 2010, File No.000-31184.

Land Status:

We hold 24 unpatented mining claims covering 480 acres in central Idaho. The mine consists of 10 separate tunnels which explore 8,798 feet of previously producing workings. There is a 43-101 Report which was completed in 2008.

Geology:

The gold bearing quartz veins in the mine area are hosted in a large monzonite intrusive known as the Idaho Batholith. The quartz monzonite is typically medium grained and light grey with quartz, feldspar and biotite as the predonimnate minerals.

Exploration History:

Gold mineralization was discovered on the Kimberly property in 1900 by George Conners and W.A. Scott. In 1940 a 50 ton per day mill was constructed. The mines produced until 1941 when the War Production Board Limitation Order L-208 closed the mine. Between 1955 and 1958 the mill was expanded to 100 tons per day. By 1964 there were 8,798 feet of underground workings on the property. Limited surface and underground diamond drilling has been conducted in recent years.

Exploration and Development Plans:

Outcrops, old trenches and other indications of the vein need to be cleaned out, sampled, surveyed and mapped. A surface diamond drill program should be undertaken to probe the depth and extent of known ore shoots. Rehabilitation of old underground workings must be done to provide access to the vein to allow for sampling along strike. Test mining is needed to determine a mining method, ore dilution, ground support, cut off grade and to provide bulk samples for milling tests.

Impairment:

We believe that, when compared to the market value of the property, the deferred costs of $927,595 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

North Idaho Holdings

We have two holdings in Boundary County, Idaho: the Regal and Montgomery Mines.

Regal Mine

The Regal Mine is a formerly producing base and precious metal mine located in the Moyie-Yaak Mining District, Boundary County, Idaho.

Location and Access:

The Regal Mine property is located 10 miles north of Bonners Ferry, Idaho, and 0.5 miles northeast of Camp Nine on Meadow Creek, Section 31, 64N, R2E, Boise Meridian.

The property can be accessed by traveling 7.5 miles north on Highway 95 from Bonners Ferry, then taking USFS Road 397 six miles to an access road that leads to the mine. The property is accessible year round. The current electrical and water supply to the property is unknown.

A map showing the Regal Mine may be found in Exhibit 99.5 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The Regal property consists of 4 contiguous unpatented mining claims that cover 80 acres of BLM property in the Moyie-Yaak Mining District, Boundary County, Idaho. Title to the property is maintained by annual payment of BLM Maintenance Fees of $560. We have made no improvements to the property, and the state of historic underground workings is unknown.

Geology:

The Regal Mine is located on the west slope of Wall Mountain (elevation 5,160 feet). The topography is mountainous with steep sided valleys. Elevations within the property range from 3,500 to 4,400 feet above sea-level. The property is largely covered by coniferous forest, with large areas of meadow grassland. Soil depth on the property ranges from bedrock exposure to roughly ten inches deep.

The Regal property is underlain by the Pre-cambrian Belt Group, which is intruded by a series of dioritic sills. Both the sills and the Belt rocks have been folded and faulted and subsequently intruded by granites of the Nelson Batholith of British Columbia. The Regal gold-silver-lead-zinc veins are exposed in granite rocks of the Nelson Batholith, which is locally fractured by regional structures.

There are two parallel N 60-70 degrees E striking veins on the Regal property, the North Vein and the South Vein. Both veins dip between 50-60 degrees southeasterly. Vein minerals are galena, sphalerite, pyrite, arsenopyrite, siderite and quartz. The gold mineralization appears to be associated with pyrite and arsenopyrite. The mineralization resembles lead-zinc-siderite veins of the Coeur d’Alene Mining District; the main difference is that the Regal Mine veins also contain considerable arsenopyrite with important gold values introduced during the later stages of mineralization. The Regal Mine is developed on 3 main levels connected by a vertical shaft. The upper most levels (No. 1 and No. 2) are accessible from the surface. Total development exceeds 3,800 feet. There is no indication of mining below the lowermost (No. 3) level. However, old mine maps indicate that both the north and south mineral zones continue to depth.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration History:

The Regal Mine was known as the Commercial Mine until 1935 when it was leased to Silver Crescent Mining Company. Silver Crescent performed exploration and development work on the property through 1945, including construction of a 100 ton per day flotation mill that was subsequently sold in 1948.

In 1968, an unknown amount of ore was sent to the Bunker Hill Smelter. The assay results indicated 0.47 oz/t gold, 15.51 oz/t silver, 32.5% lead, 29.8% zinc, and 0.42% copper.

In 1971, Silver Dollar Mining Company submitted a 39.8 - ton (wet weight) shipment to the East Helena Smelter, Montana. The concentrate sample assayed 0.41 oz/t gold, 4.8 oz/t silver, 6.6% lead, and 6.7% zinc. The property has been largely inactive since that time except for a widening of the Number 2 adit level and re-timbering of the portal in the early 1990’s.

We acquired the claims in 2003 for $15,000.

Exploration Plans:

The Regal Mine has the potential to host economically extractable ore containing gold, silver, lead and zinc on a modest scale. Historical mine maps indicate high-grade mineralization continuing below the Number 3 level. Surface geological mapping will identify any lateral extent of the mineralization, and if there are any parallel mineralized structures.

The following are recommended actions for the rehabilitation of the Regal Mine:

Rehabilitate the surface shaft opening and cover all open workings to prevent water access;
Rehabilitate Number 2 level portal to drain the number 2 level workings;
Stabilize mine workings with rock bolting and roof support in essential areas;
Conduct systematic channel sampling of vein exposures on the Number 1 and 2 levels (if accessible);
Perform underground geological mapping of the Number 2 level;
Perform surface geological mapping to identify surface expression of faults and veins;
Conduct surface stream sediment sampling program to identify additional areas of mineralization;
Conduct ground magnetic survey to identify possible veins and structures;
Stake additional claims to cover lateral extensions of mineralized structures;
Locate potential RC and diamond drill-hole locations for surface drilling; and
Reconnaissance work on prospects located along strike of the structures controlling mineralization in the Regal Mine.

No timetable for exploration has been set and costs for the recommended exploration have not been determined.

Impairment:

We believe that when compared to the market value of the property, the deferred costs of $15,000 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

Montgomery Mine Group

We control unpatented claims that cover and surround the Montgomery Mine near Copeland in Boundary County, Idaho.

Location and Access:

The claims are in Section 30, Township 65 North, Range 1 East. A geographic reference point for the claims is 48°57’ 19” North and 116° 23’ 02” West.

The property is reached via 2 miles of access road from County Road 49 3.7 miles north on State Highway 1 from the intersection of State Highway 1 and U.S. Highway 95, approximately 12 miles north of Bonners Ferry, Idaho. The Montgomery Mine is accessible year round.

A map showing the Montgomery Mine may be found in Exhibit 99.7 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

Montgomery Mine claim group consists of 25 unpatented lode claims covering 500 acres of BLM land. The claims are located on the southwest slope of Hall Mountain with approximately 1,800 feet of relief in the claim group. No additional claims are staked in the area. The claims are maintained by annual payment of BLM Maintenance Fees of $3,500. We have not made improvements to the property. Commercial power is available on County Road 49. Water access is unknown.

Geology:

The property is polymetallic in nature. There are two types of mineralization present. There is a low-grade, high volume copper, nickel, platinum group elements mineralization present in the basic sills, and a high-grade, low volume polymetallic (copper, lead, gold and silver) vein running through the sill.

The area is underlain by the Prichard and Allrich formations of the lower Belt series. The quartzites and impure quartzites of the Prichard and Allrich formations have been locally intruded by diorite sills. These sills strike northwest across the property and dip gently to the northeast.

The Diorite sills exhibit anomalous Platinum Group Metals (PGM) values that may have economic potential. The sills also host prominent quartz veins that exhibit significant copper, lead, silver, and gold values that provide an additional economic potential to the property.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration History:

The property has been explored by means of approximately 3,500 feet of drift development in 3 primary tunnels and 4 smaller tunnels. This development appears to establish lateral continuity of the sills and veins. In addition to drifting there have been several diamond drill holes completed and at least one surface geophysics survey has been run on the property.

Records from this historic work are incomplete or unavailable, therefore results from this work are considered unreliable for resource analysis or interpretation.

In the past, this property has been explored by diamond drilling, IP (induced polarization) testing, and with a magnetometer study. The results of these past tests will form the blueprint for further exploration.

Exploration Plans:

These claims require the rehabilitation of the 3 primary tunnels. The current condition of these tunnels is unknown. Once access is available the sills and veins will be mapped and sampled underground. In addition the property should have a new surface geophysics survey performed.

Results from these efforts will be analyzed and used to develop a comprehensive drill program. Completion of these activities could produce a mineralized material resource that can then be subjected to a feasibility study prior to production development.

No timetable for exploration has been set and costs of the recommended exploration have not been determined.

Impairment:

The acquisition costs of $43,557 were included in exploration expenses in a prior year.

Montana Holdings

We have two property groups in Montana: the Stillwater Extension Claims and the Princeton Gulch Group.

Stillwater Extension Claims

The Stillwater Extension property consists of 10 unpatented lode claims covering 200 acres of the Stillwater Complex of south central Montana. The Stillwater Complex is a mafic-ultramafic layered intrusive that includes the 28-mile long J-M Reef, which hosts Platinum Group Metals (PGM).

Location and Access:

The Stillwater Extension claims are located approximately five miles southeast of the Stillwater Mine and cover a projected eastern extension of J-M Reef. The claims are located in Sections 2, 3, 11, T6S, R16E.

A map showing the Stillwater Extension Claims may be found in Exhibit 99.6 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

In 2003, we purchased the Stillwater Claims for $15,000. The claims are maintained by annual payment of BLM Maintenance Fees of $1,400. We have made no improvements to the property. Power and water status are unknown.

Geology:

The Stillwater Extension Claims are located within the Stillwater mafic-ultramafic layered intrusive complex. The uniquely PGM-enriched J-M Reef and its characteristic host rock package represent one such layer in the sequence. The PGM in the J-M Reef consist primarily of palladium, platinum and a minor amount of rhodium. The reef also contains approximately 3 percent iron, copper and nickel sulfides, plus trace amounts of gold and silver.

The property currently is without known reserves and the proposed program is exploratory in nature.

Exploration History:

The Johns Manville Corporation discovered palladium and platinum along the J-M Reef of the Stillwater Complex in the early 1970’s. In 1979, a Manville subsidiary partnered with Chevron to develop the property. Underground operations at the Stillwater Mine commenced in 1986.

Exploration Plans:

We plan to conduct an evaluation program including geologic mapping, rock chip and soil geochemical surveys, and interpretation of public domain geophysical data. The program will be conducted to determine the suitability of a joint venture partner. No timetable for exploration has been set and costs for the recommended evaluation program have not been determined.

Impairment:

The deferred costs of $15,000 were included in exploration expenses in a prior year.

Princeton Gulch Group

We control unpatented claims that cover and surround the Princeton Gulch placer in Granite County in south central Montana.

Location and Access:

The Princeton Gulch claims are located in Sections 20 & 21 of Township 8 North, Range 12 West, 7 miles northeast of the town of Maxville, Montana. Access is provided by county roads east of State Highway 10A at Maxville, Montana. Turn east on the Maxville/Princeton Road at Maxville for 4.5 miles. Turn northeast on County Road 1500 for 2.5 miles. The claim group occupies the mountain valley running to the east from this point.

A map showing the Princeton Gulch Group may be found in Exhibit 99.10 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

This claim group consists of 4 unpatented placer claims covering 80 acres and 2 unpatented load claims covering 40 acres, for a total of 120 acres. The claims are maintained by annual payment of BLM Maintenance Fees of $840. We have not improved the property. Electrical status is unknown. Water is available via streams running through the property. Three holding/settling ponds, approved by the State of Montana as harmless to Bull Trout found in the area, have been constructed.

Geology:

This claim group lies in mountainous terrain on the east slope of the Deerlodge Range. The country rocks are folded and faulted marbles, phyllites and quartzites of Jurassic/Cretaceous age. The Royal stock outcrops less than 1 mile east of this claim group. The metamorphism is a result of the emplacement of the Royal stock and other nearby stocks and batholiths.

The claims host placer deposits within 18” of bedrock along the floor of the gulch. The load claims could potentially host fissure veins found and exploited on adjacent claims and properties; however, there are no reports of veining on this property.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration History:

The claims have been worked sporadically by small scale owner/operators for a number of years. The claims have only been placer mined in the valley bottom. No additional exploration work has been done. The Princeton Mining District has had several past producers, both lode and placer in the late 1800’s and first half of the 1900’s.

Exploration Plans:

The claim group will benefit from detailed geologic mapping, sampling and trenching. Beyond this basic exploration, modern geophysics and remote sensing should be applied to the claim group. No timetable for exploration has been set and costs of the recommended exploration have not been determined.

Impairment:

The acquisition costs of $13,000 were included in the exploration expenses in a prior year.

Arizona Gold Holdings

We hold two claim groups in the Oatman Mining District: the Western Gold and Gold Road Claims along with the Cerro Colorado Group in Pima County, AZ.

Western Gold Claims

The Western Gold property consists of 13 unpatented lode claims covering 240 acres within the Oatman Mining District of Mohave County, Arizona.

Location and Access:

The Western Gold claims are located approximately 1 mile West of Gold Road Mine & 1 mile North of United Western Mine.

A map showing the Western Gold Claims may be found in Exhibit 99.8 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The Oatman District lies on the western flank of the Black Mountains, a fault-bounded tertiary volcanic series. In 2003, we acquired the Western Gold Claims for $15,000. The claims are maintained by annual payment of BLM Maintenance Fees of $1,820. We have made no improvements to the property. Power and water sources are unknown.

Geology:

Gold deposition appears to be a late feature associated with the Moss porphyry intrusion. The gold bearing ore bodies of the Oatman District are located along northwest trending veins and faults. The main mineralized structures within the property are the United and Middle veins. These veins were mined at the United Western and United Eastern Mines.

Electrum is the predominant ore mineral. Gangue minerals include quartz, calcite, adularia, minor fluorite, and trace amounts of pyrite, marcasite, and chalcopyrite.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration History:

Gold was first discovered in the Oatman District in 1863. Between 1897 and 1942, the Oatman District produced 2.2 million ounces of gold and 800,000 ounces of silver at an average grade of 0.58 opt gold and 0.17 opt silver.

From 1979 to 1982, Hecla Mining Company and Canadian Natural Resources conducted exploration. Extensive geological mapping and diamond drilling was conducted on the Tom Reed Vein System before the project was terminated in 1982.

Exploration Plans:

The exploration plans for the Arizona Project are to conduct surface geological mapping, surface soil and rock sampling programs and conduct IP and magnetic surveys of the claim areas to identify orientation of the sub-surface United Western Vein.

No timetable for exploration has been set and costs of the recommended exploration have not been determined.

Impairment:

The deferred costs of $15,000 were included in exploration expenses in a prior year.

Gold Road Claims

The Arizona property consists of 16 unpatented lode claims located in Mohave County, Arizona covering 320 acres of the Oatman mining district of northwest Arizona.

Location and Access:

The Gold Road claims are divided into two groups. The KO group of 7 claims is located in S14 T19N R20W approximately 3000 ft southwest of the Western Gold claims, approximately 0.9 miles west of the Gold Road Mine and 0.8 miles north of the United Western Mine. The TS group of 9 claims is located in S12 T19N R20W approximately 6000 ft east of the Arizona Gold field claims and 5000 feet east northeast of the KO group of claims. County Hwy 10 travels through the TS group.

Land Status:

In 2003, we acquired the Arizona Claims for $1,500. The claims are maintained by annual payment of BLM Maintenance Fees of $2,240. We have not improved the property. Power and water sources are unknown.

Geology:

The KO group follows the easterly trend of the Mallory Fault line and covers the down dip extension of the Kokomo vein. The TS group follows the southeasterly extension of the Gold Ore Vein.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration Plans:

We anticipate developing exploration plans in fiscal 2011.

Impairment:

The deferred costs of $1,500 were included in exploration expenses in a prior year.

Cerro Colorado Group

We control 3 unpatented claims covering 60 acres in the Cerro Colorado Mining District 35 miles southwest of Tucson, Arizona.

Location and Access:

From Tucson take I-19 south towards Nogales approximately 33 miles to Exit 48. The claim group is 15 miles west on Arivaca Rd from Exit 48. The claims are in Section 22, Township 20S, Range 10E. A geographic reference point for the claims is 31°39'32"North, 111°16'19"West.

A map of the property may be found in Exhibit 99.11 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184.

Land Status:

The claim group is located in the Cerro Colorado mining district in the Cerro Colorado Mountains of Southwest Arizona. The claims are maintained by annual payment of BLM Maintenance Fees of $420. We have not improved the property. Power and water sources are unknown.

Geology:

Mineralization in the district is epithermal quartz-fissure veins with minor base metal sulfides and mercury-bearing tetrahedrite. Silver and gold enrichment occur in oxidized zones. Host rocks are a complex of Cretaceous quartz latite and andesite porphyry flows and tuff with some interbedded sedimentary beds, invaded by Laramide andesite porphyry, rhyolite and dioritic plugs and dikes.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration History:

This mining district is one of the oldest producing areas in Arizona with scattered small, and relatively shallow, mines and prospects active intermittently from at least the 1770's to about 1950. Total estimated and recorded production has been some 4,500 tons of ore containing approximately 376,000 ounces silver, 460 ounces gold and small amounts of copper and lead.

Exploration Plans:

These claims and the area around them will be geologically mapped. This mapping will emphasize vein intensity, rock type, and alteration. In addition to the mapping, limited ground magnetic surveys should be run to help identify any geophysical anomalies. The results of this initial work will guide follow up geophysics and/or drilling.

No timetable for exploration has been set and costs of the recommended exploration have not been determined.

Impairment:

The deferred costs of $1,500 were included in exploration expenses in a prior year.

Washington Holdings

We control 19 unpatented mining claims covering 380 acres in the heart of the Wenatchee Gold Belt located in central Washington.

Shaft Claims

Location and Access:

Entering Wenatchee from the north, you will be traveling south on State Route #2 and #97, at the stop light on the northern edge of town, SR #2 and #97 veers to the right and crosses the Columbia River, you will continue south, or straight ahead, on SR #28 until you reach exit 285 N and then turn right and cross the Columbia River on the old bridge span. After crossing the Columbia River, you will travel about 0.5 mile and will come to Mission Street, turn left on Mission Street for 1.5 miles. At this point Mission Street becomes Squilchuck Road and you will continue on Squilchuck Road for another 3.5 miles when you will encounter a road sign directing you to take a left hand turn onto Cranmer Drive and also be heading to the Wenatchee heights subdivision. Travel less that 1 mile on Cranmer Drive and you will come to the Wenatchee Heights Road, turn left on Wenatchee Heights Road and travel 1 mile until you come to a fork in the road, take the left hand fork and you will be on Loop Road. The Shaft claims are located to the east of Loop Road.

A map showing the Shaft Claims is contained in Exhibit 99.15 which was filed as an exhibit to our Annual Report on Form 10-KSB filed with the Commission on January 10, 2010, File No.000-31184.

Land Status:

We hold 19 unpatented mining claims covering 380 acres in central Washington. The claims are located within the heart of the Wenatchee Gold Belt. We have not improved the property. Power and water sources are unknown.

Mexico Properties

Other Mexican Exploration Properties

We have an interest in several other Mexican exploration projects which we do not currently consider to be material.

La Vibora

La Vibora is a gold-silver prospect in which Shoshone acquired a 25% interest in the property in the year 2000. No exploration has been conducted on the property since our acquisition. The property is located seven miles west of Mexican Highway 17, approximately 22 miles south of the city of Esquida. We have made no improvements to the property. Power and water status is unknown.

Geology:

The project area is underlain by granodiorites and quartz monzonites of upper Cretaceous age. Mineralization is associated with the granites.

The property covers three sub-parallel veins that have an apparent length of approximately 1,000 ft. The veins are fracture-filling, dipping approximately 70 degrees to the SW and are characterized by the presence of sulfides (dominantly pyrite) that have been locally oxidized. Gangue is dominated by quartz and calcite.

Sampling conducted in 1994 reported a 75 foot wide bulk sample that had an average grade of 0.20 oz/t gold. Four samples that were taken on the No. 1 vein, over a 5 foot (adjusted) width averaged 0.29 oz/t gold.

The property is currently without known reserves and the proposed program is exploratory in nature.

Exploration Plans:

We currently have no exploration plans for La Vibora.

The La Morena Placer

The property is located adjacent to the La Vibora prospect south of the city of Esquida in the State of Sonora. The property is a gold silver placer deposit. There has been no systematic exploration of the La Morena Placer. Shoshone acquired a 25% interest in the property in 2000. We have not made improvements to the property. Power and water supplies are unknown.

Exploration History:

Distal from the La Vibora property is the La Morena Placer. This property has had limited auger and assaying returning average grades of 0.03 oz/t gold. No resource estimate has been completed and the property is currently without known reserves.

Exploration Plans:

We currently have no exploration plans for La Morena Placer.

OUR EXPLORATION PROCESS

Our exploration program is designed to acquire, explore and evaluate exploration properties in an economically efficient manner. We have not at this time identified or delineated any metals reserves on any of our properties.

Our current focus is primarily on the acquisition of additional exploration properties. Subject to our ability to raise the necessary funds, we intend to implement an exploration program that may cover some or all of our other properties at various times as we deem prudent.

We expect our exploration work on a given property to proceed generally in three phases.

The first phase is intended to determine whether a prospect warrants further exploration and involves:

researching the available geologic literature;
interviewing geologists, mining engineers and others familiar with the prospect sites;
conducting geologic mapping, geophysical testing and geochemical testing;
examining any existing workings, such as trenches, prospect pits, shafts or tunnels;
digging 150 foot long and 10-to-20 foot wide trenches that allow for an examination of surface vein structure as well as for efficient reclamation, re-contouring and re-seeding of disturbed areas; and
analyzing samples for minerals that are known to have occurred in the test area.

Subject to obtaining the necessary permits in a timely manner, the first phase can typically be completed on an individual property in several months at a cost of less than $200,000. We have completed research on and examination of each of our properties, and have commenced geophysical work and sampling on some of our properties.

The second phase is intended to identify any mineral deposits of potential economic importance and would involve:

examining underground characteristics of mineralization that were previously identified;
conducting more detailed geologic mapping;
conducting more advanced geochemical and geophysical surveys;
conducting more extensive trenching; and
conducting exploratory drilling.

Subject to obtaining the necessary permits in a timely manner, the second phase can typically be completed on an individual property in six to nine months at a cost of less than $1 million. None of our properties has reached the second phase.

The third phase is intended to precisely define depth, width, length, tonnage and value per ton of any deposit that has been identified and would involve:

drilling to develop the mining site;
conducting metallurgical testing; and
obtaining other pertinent technical information required to define an ore reserve and complete a feasibility study.

Depending upon the nature of the particular deposit, the third phase on any one property could take one to five years or more and cost up to $20,000,000 or more. None of our properties has reached the third phase.

We intend to explore and develop our properties ourselves, although our plans could change depending on the terms and availability of financing and the terms or merits of any joint venture proposals.

ENVIRONMENTAL COMPLIANCE

Our primary cost of complying with applicable environmental laws during exploration is likely to arise in connection with the reclamation of drill holes and access roads. Drill holes typically can be reclaimed for nominal costs, although the BLM recently promulgated new surface management regulations which may significantly increase those costs on BLM lands. Access road reclamation may cost up to $50,000 to $100,000 if road building has been done, and those costs, too, are likely to increase as the result of the new BLM regulations. As we are currently in the exploration stage on all of our properties, reclamation costs have not yet been incurred, and cannot be reasonably estimated for each property.

EMPLOYEES

At September 30, 2010, we had 10 employees, four of whom are both officers and directors.

GLOSSARY OF TERMS

AMPHIBOLITE: granular metamorphic rocks.

ANOMALY: a deviation from uniformity or regularity in geophysical or geochemical quantities.

ANTICLINE: layered rock formations structurally folded into a convex structure with a core that hosts the oldest rocks.

ARCHEAN: geologic age older than 2,500,000 years.

BATHOLITH: a large emplacement of igneous intrusive or plutonic rock that forms from cooled magma within the Earth's crust.

BLEBS: a vesicle, blister or bubble.

BRECCIA: rock in which angular fragments are surrounded by a mass of fine-grained minerals.

CHALCOPYRITE: the main copper ore, which is widely occurring and found mainly in veins.

CIRCULATION DRILL: a rotary drill or rotary percussion drill in which the drilling fluid and cuttings return to the surface through the drill pipe, minimizing contamination.

CRETACEOUS AGE: the geologic age period dating from approximately 68 million years to 142 million years.

CROSS CUTS: a horizontal opening driven from a shaft and (or near) right angles to the strike of a vein or other ore body.

DIAMOND DRILL: a type of rotary drill in which the cutting is done by abrasion rather than by percussion. The hollow bit of the drill cuts a core of rock, which is recovered in long cylindrical sections.

DISSEMINATED: fine particles of mineral dispensed through the enclosing rock.

DEVELOPMENT: work carried out for the purpose of opening up a mineral deposit and making the actual extraction possible.

DIKES: a tabular igneous intrusion that cuts across the structures of surrounding rock.

DIP: the angle at which a vein, structure or rock bed is inclined from the horizontal as measured at right angles to the strike.

DRIFTS: a horizontal passage underground that follows along the length of a vein or mineralized rock formation.

EXPLORATION: work involved in searching for ore by geological mapping, geochemistry, geophysics, drilling and other methods.

GABBRO: Dark colored basic intrusive rocks. Intrusive equivalent of volcanic basalt.

GEOCHEMISTRY: study of variation of chemical elements in rocks or soils.

GEOPHYSICS: study of the earth by quantitative physical methods.

GNEISS: a layered or banded crystalline metamorphic rock the grains of which are aligned or elongated into a roughly parallel arrangement.

HYDROTHERMAL: pertaining to hot water, especially with respect to its action in dissolving, re-depositing, and otherwise producing mineral changes within the earth's crust.

INTRUSION/INTRUSIVE: a volume of igneous rock that was injected, while still molten, into the earth's crust or other rocks.

LITHOLOGY: The character of a rock described in terms of its structure, color, mineral composition, grain size and arrangement of its component parts.

MAFIC: Pertaining to or composed dominantly of the ferromagnesian rock-forming silicates; used to describe some igneous rocks and their constituent minerals.

METAMORPHISM: The mineralogical and structural changes in solid rock that have been caused by heat and pressure at depth over time.

MINERALIZATION: the concentration of metals and their compounds in rocks, and the processes involved therein.

NORITE: a course grained igneous rock formed at great depth.

ORE: material that can be economically mined and processed.

ORE BODY: a continuous, well-defined mass of material of sufficient ore content to make extraction economically feasible.

OUTCROP: the part of a rock formation that appears at the earth's surface, often protruding above the surrounding ground.

PYRITE: the most widespread sulfide mineral.

PYROXENITE: any group of minerals.

QUARTZITE: a sedimentary rock consisting mostly of silica sand grains that have been welded together by heat and compaction.

RECLAMATION: the restoration of a site after exploration activity or mining is completed.

SCHIST: a foliated metamorphic rock the grains of which have a roughly parallel arrangement.

SEDIMENTARY ROCKS/SEDIMENTS: rocks resulting from the consolidation of loose sediments of older rock transported from its source and deposited.

SHEAR OR SHEARING: The deformation of rocks by lateral movement along numerous parallel planes, generally resulting from pressure and producing such metamorphic structures as cleavage and schistosity.

SILLS: a near horizontal flat-bedded stratum of intrusive rock.

SKARN: the formation resulting from the reaction of two adjacent rock types exchanging elements and fluids during regional and/or contact metamorphosis.

SULFIDE: a metallic mineral containing reduced sulphur.

STRIKE: the course or bearing of a vein or a layer of rock.

ULTRAMAFIC: said of an igneous rock composed chiefly of mafic materials.

UNPATENTED MINING CLAIM: a parcel of property located on federal lands pursuant to the U.S. General Mining Law of 1872 and the requirements of the state in which the unpatented claim is located, the paramount title of which remains with the federal government. The holder of a valid, unpatented lode mining claim is granted certain rights including the right to explore and mine such claim.

VEIN: an epigenetic mineral filling the fault or other fracture, in tabular or sheet like form, often with associated replacement of the host rock, or a mineral deposit of this form or origin.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by the Exchange Act and are not required to provide the information required under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We are a smaller reporting company as defined by the Exchange Act and are not required to provide the information required under this item.

ITEM 2. PROPERTIES

Our interests in its exploration properties are described in Item 1.

We own a 50% unencumbered interest in a commercial office building in Coeur d’Alene, Idaho. This building contains our executive offices and is located at 3714 W Industrial Loop, Coeur d’Alene, ID, 83815. Our telephone number is (208) 664-0620.

We placed into service our refurbished Lakeview Mill on October 1, 2008. Our Lakeview Mill is an on-site, 100 tons, expandable to 350 tons per day, flotation mill that we currently use to produce concentrates from stockpiled ore. This property is owned without encumbrance.

We own a mill at our Rescue Mine which we purchased from Kimberly Gold Mines, Inc. on March 12, 2009. We are currently in the process of refurbishing this mill which we expect to complete by July 2011 at a total cost of $$10,000. We estimate that this refurbished mill will have a capacity of 120 tons per day. This property is owned without encumbrance.

ITEM 3. LEGAL PROCEEDINGS

We are, from time to time, involved in various legal proceedings incidental to the conduct of business. In the opinion of management, our gross liability, if any, and without any consideration given to the availability of insurance or other indemnification, under any pending litigation or administrative proceedings, including that discussed below, would not materially affect our consolidated financial position, results of operations or cash flows.

On November 17, 2008, the United States Environmental Protection Agency (EPA) filed a civil action against us in the United States District Court for the District of Idaho. The civil action seeks recovery of funds paid by the EPA in response to alleged releases of hazardous substances at the Company’s Idaho Lakeview mine and mill site in Bonner County, Idaho. We and the EPA have reached an agreement whereby we must pay $50,000 and will not to conduct activities on the minimal amount of ground that would disturb the cleanup work in place at the properties subject to the civil action. On August 4, 2010, we paid this liability in full.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth information concerning our directors and executive officers.

NAME	AGE	POSITION
Lex Smith	58	President and Director
Carol Stephan	69	Secretary and Chairman of the Board
Melanie Farrand	55	Treasurer and Director
Don Rolfe	73	Vice President and Director
Edward Lehman	53	Director

Set forth below is certain additional information with respect to the directors and executive officers.

Lex Smith holds a BA in political science from Drake University, an associate degree in business systems management and an associate degree in paralegal studies. Additionally, for the last 13 years, he has been a business consultant and project manager in the United States for the Lehman, Lee & Xu Law Firm in Beijing, China, and has served as a consultant to the Firm’s Mining Law Department for the past 2 years. Mr. Smith entered the mining business in 1993 as the field manager and owner of multiple mining claims in Montana and has subsequently been closely involved with several mining companies and mining projects in the Pacific Northwest. Further, Mr. Smith has served as the President of the Silver Valley Mining Association since 2003, and currently also serves as President of Natural Resources Education Outreach, an Idaho non-profit corporation.

Carol Stephan has over 30 years of experience in the mining and timber industries. She currently serves as a Director and Secretary of Shoshone, as well as Secretary and Treasurer of several small mining companies. In addition, Ms. Stephan currently owns and operates several successful businesses in Idaho.

Melanie Farrand has been working in the mining industry for the past six years as an administrative secretary and bookkeeper. She also serves on the Board of Directors of several mining companies. Previously she was the office manager for a Land Surveying company for ten years, responsible for payroll, bookkeeping and research. Ms. Farrand is currently serving as a Director and Officer of Shoshone Silver Mining Company.

Don Rolfe brings a wealth of knowledge and experience with him. Don is a graduate of the Montana School of Mines, and a seasoned mine engineer with over 30 years of industry management experience. He has extensive experience with a variety of minerals; including silver, gold, bentonite clay, phosphate, uranium and tungsten, built during his tenure with some of the leading US mining companies, including Anaconda, Hecla, Union Carbide, Homestake, and most recently served as President and Director of Kimberly Gold Mines, Inc.

Edward Lehman is the Managing Director of Lehman, Lee & Xu Law Firm (www.lehmanlaw.com), one of the top 3 commercial law firms in China, with offices throughout mainland China and branches in Hong Kong, Macau, and Mongolia. Based in Beijing, Mr. Lehman specializes in the legal aspects of doing business in China. He advises foreign companies on joint ventures, wholly owned subsidiaries and holding companies, technology, licensing, engineering and construction projects, and the financing of such projects, as well as the protection of intellectual property rights in transactions and projects in China, and on mining law. Among other degrees and certificates, Mr. Lehman holds a Juris Doctor degree from Loyola University of Chicago. Mr. Lehman was admitted to the Illinois bar in 1986, and has been admitted to the Illinois Supreme Court; U.S. Court of International Trade; U.S. Court of Appeals for the Armed Forces; U.S. Tax Court; U.S. Supreme Court, U.S. District Court, and U.S. Court of Appeals.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSER PURCHASES OF EQUITY SECURITIES

Our shares are traded on the OTC Pink Sheets operated by the National Association of Securities Dealers, Inc. (NASD) under the trading symbol SHSH.OB. Summary trading by quarter for fiscal 2010 and 2009 are as follows:

Fiscal Quarter		High (a)		Low (a)

2010
Fourth Quarter	$	0.15	$	0.08
Third Quarter	$	0.18	$	0.11
Second Quarter	$	0.20	$	0.13
First Quarter	$	0.24	$	0.13

2009
Fourth Quarter	$	0.18	$	0.08
Third Quarter	$	0.12	$	0.07
Second Quarter	$	0.15	$	0.05
First Quarter	$	0.18	$	0.04

(a) These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

As of September 30, 2010, we had approximately 1,649 holders of record of our common stock.

The Company has not paid any dividends since our inception and do not anticipate paying any dividends on its common stock in the foreseeable future. There are no restrictions which preclude the payment of dividends.

The Company has no equity compensation plan or plans.

Unregistered Sales of Equity Securities

None.

Purchases of Equity Securities by the Issuer

None.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by the Exchange Act and are not required to provide the information required under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements

From time to time, Shoshone and its senior managers have made and will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are contained in this report and may be contained in other documents that Shoshone files with the Securities and Exchange Commission. Such statements may also be made by Shoshone and its senior managers in oral or written presentations to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Also, forward-looking statements can generally be identified by words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “seek,” “expect,” “intend,” “plan” and similar expressions.

Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. As such, our actual future results, performance or achievements may differ materially from the results expressed in, or implied by, our forward-looking statements.

Our forward-looking statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and Notes presented elsewhere in this report.

Plan of Operation

Lakeview Property

During 2010, we entered into an agreement to sell silver concentrate produced at our Lakeview property to a smelter for refining. To date, from our test runs we have generated revenues of $20,111 from the sale of concentrate to the smelter. Our long-term goal is to mine and mill both silver and gold at our Lakeview property.

Rescue Mine Property

Work at the Rescue Mine resumed in June 2010 after a temporary cessation for inclement weather. Our first priority has been the upgrading and renovating the mill. Once this work is completed, test runs on stockpiled ore will be conducted.

Mine development will require some ground support, general clean up, the installation of a refuge station and the addition of air and water lines. A new decline portal has been planned to access the Rescue vein 1,000 feet east of the mill. Road work, site preparation and collaring off for the new decline portal will be accomplished next summer. This new decline portal will provide access to un-mined portions of the Rescue vein and, when completed, will serve as the secondary escape-way from the mine as well as the exhaust ventilation. At this time, we are setting up to complete a seven-hole drilling program to establish a more detailed plan of operation.

Electrical work, which included installation of electrical panels, lights and power outlets, was completed in the large staging building, which was erected next to the Rescue Mill portal last summer to service operations in the Rescue Mine. The new building is fully MSHA compliant. Additionally, a diesel generator was installed to provide power to the Rescue Mine as part of our ongoing preparations to bring the Rescue Mine and mill back into productions.

Please refer to our discussion regarding our ability to continue as a going concern below for further details.

Going Concern

As shown in the accompanying financial statements, we have limited cash and limited revenues and incurred an accumulated deficit of $2,583,524 from inception through September 30, 2010. These factors raise substantial doubt about our ability to continue as a going concern. We intend to seek additional capital from new equity securities offerings that will provide funds needed to increase liquidity and fully implement our business plan. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event we cannot continue in existence.

Historically, we have generally funded our operations with proceeds from the sale of marketable securities, royalty and option agreement payments, and from the sale of our common stock. Should we be unable to raise capital through any of these avenues, our business, financial position, results of operations and cash flow will likely be materially adversely impacted. As such, substantial doubt as to our ability to continue as a going concern remains as of the date of these financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event we cannot continue in existence. An estimated $1,000,000 is believed necessary to continue operations and increase development through the next twelve months. Currently, we anticipate raising the majority of the $1,000,000 through the issuance of common stock to private investors. The timing and amount of capital requirements will depend on a number of factors, including demand for products and services, capital expenditures and revenues generated.

Comparison of fiscal 2010 to fiscal 2009:

Results of Operations

The following table sets forth certain information regarding the components of our Consolidated Statements of Operations for fiscal 2010 as compared to fiscal 2009. This table is provided to assist in assessing differences in our overall performance:

				Fiscal Year Ended
				2010		2009		$ Change	% Change

Revenues			$	20,111	$	-	$	20,111	100.0%
Cost of Revenues				-		-		-	100.0%
Gross Profit				20,111		-		20,111	100.0%
	General and administrative			536,656		491,324		45,332	9.2%
	Professional fees			123,445		286,369		(162,924)	-56.9%
	Depreciation			178,804		130,743		48,061	36.8%
	Mining and exploration expenses			542,724		841,519		(298,795)	-35.5%
	Net gain on sale of load claim			(175,000)		-		(175,000)	100.0%
		Total Operating Expenses		1,206,629		1,749,955		(543,326)	-31.0%
Loss from Operations				(1,186,518)		(1,749,955)		563,437	-32.2%
Other Income (Expense)
	Dividend and interest income			73,467		115,022		(41,555)	-36.1%
	Gain on sale of fixed asset			5,000		-		5,000	100.0%
	Interest expense			(4,242)		(2,398)		(1,844)	76.9%
	Net gain (loss) on sale of securities			1,036		2,225		(1,189)	-53.4%
	Other income (expense)			142		(43,391)		43,533	-100.3%
	Other-than-temporary impairment of investments			(47,800)		(101,479)		53,679	-52.9%
	Bad debt recovery			47,008		-		47,008	100.0%
	Cancellation of debt income			69,418		-		69,418	100.0%
		Total Other Income (Expense)		144,029		(30,021)		57,624	-191.9%
Net (Loss) Income			$	(1,042,489)	$	(1,779,976)	$	737,487	-41.4%

Overview of Operating Results

The decrease in net loss in fiscal 2010 was primarily due to decreases in virtually all administrative expenses. Also contributing to the decrease in net loss in fiscal 2010 was the sale of a lode claim, a significant reduction in legal fees and the recovery of a previously allowed for receivable. Partially, offsetting these positive impacts on fiscal 2010 was the issuance of common stock to directors valued at $200,000.

Also, during fiscal 2010, we entered into an agreement to sell silver concentrate produced at our Lakeview property to a smelter for refining. During fiscal 2010 we generated revenues of $20,111 from the sale of concentrate to the smelter. We expect that revenues from this source will be limited in the near term due to the continuing depletion of our stockpiled ore reserves.

Operating Expenses

Operating expenses decreased in fiscal 2010 as we reduced expenditures to align our operations with our sources of capital. This action primarily included the temporary cessation of operations at our Lakeview property, the temporary laying off of all employees starting in the month of March 2010 and across-the-board reductions in non-essential expenditures. In June 2010, we resumed limited operations at our Lakeview property and re-hired seven employees. Going forward we expect our administrative expenses to remain near fiscal 2010 levels.

In June 2010, we sold our North Osburn claims in the Silver Valley to an unrelated party for $175,000. Since we had previously expensed the approximately $10,000 cost to acquire and maintain this property, the entire proceeds were accounted for as gain on the sale of lode claim and was recorded as a component of operating expenses.

Also contributing to the decrease in operating expenses was a reduction of over $150,000 in legal fees. During fiscal 2009, we acquired certain assets from Kimberly Gold Mines, Inc. in exchange for 12,145,306 of our common stock. In connection with this acquisition, we incurred significant one-time legal fees.

Partially offsetting these positive impacts was the issuance of 1,250,000 common shares to four directors in exchange for services valued at $200,000.

Other Income (Expenses)

Other income (expenses) improved from a net expense of $30,021 in fiscal 2009 to a net income of $27,603 during fiscal 2010. This improvement was primarily due to an impairment charge of $101,479 in fiscal 2009 compared with $47,800 in fiscal 2010. Also contributing to this improvement was a charge we incurred in fiscal 2009 related to a civil action filed by the United States Environmental Protection Agency and the recovery of prior year’s bad debt. Partially offsetting these positive impacts was a $41,554 reduction in interest income.

At September 30, 2010, we determined that certain of our available-for-sale securities had experienced an impairment that was other-than-temporary. Key factors used in determining whether or not the impairment was other-than-temporary included the length of time and the extent to which the market value of the securities had been below their cost. In connection with this determination, we recognized an impairment charge of $47,800.

On November 17, 2008, the EPA filed a civil action against Shoshone in the United States District Court for the District of Idaho. The civil action sought recovery of funds paid by the EPA in response to alleged releases of hazardous substances at our Idaho Lakeview mine and mill site in Bonner County, Idaho. We reached an agreement with the EPA whereby we must pay $50,000 and we are prohibited from conducting activities on the minimal amount of ground that would disturb the cleanup work in place at the properties subject to the civil action. On August 4, 2010, we paid this liability in full.

During 2009, we created an allowance for a related party receivable in the amount of $53,548. We created the allowance when this related party filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Idaho. In September 2010, the Company received a payment of $47,008 on this receivable. The remaining amount owed of $6,540 remains in the allowance account as its collection is doubtful.

During fiscal 2010, we determined that the balance of $69,418 remaining in the accounts payable we assumed with the acquisition of Kimberly Gold Mines, Inc. was not going to be settled. Accordingly, we made an entry to remove the accounts payable and to record cancellation of debt income of $69,418. See “Note 15. Kimberly Gold Mines, Inc.” to our consolidated financial statements for further details.

Partially offsetting these positive impacts was our having three additional interest bearing notes receivable during most of fiscal 2009 compared with none during fiscal 2010. At varying times during fiscal 2009, these three notes were settled in exchange for various assets. To a lesser extent, a reduction of $18,338 in the imputed interest income associated with a non-interest bearing note receivable was also a mitigating factor.

Overview of Financial Position

At September 30, 2010, we had cash of $55,853 and total liabilities of $260,216. During 2010, we raised $705,155 in net proceeds from the issuance of 7,051,550 shares of our common stock. Also, In June 2010, we sold our North Osburn claims in the Silver Valley for $175,000. These proceeds were used primarily to continue limited exploration activities at our Lakeview property, to continue refining our milling process at that same location and to continue refurbishing our newly acquired mill building at our Rescue mine.

Property, Plant and Equipment

At September 30, 2010, property, plant and equipment before accumulated depreciation totaled $3,459,443, an increase of $73,173, from $3,386,270 at September 30, 2009. The increase related primarily to land improvements and equipment purchases at our Rescue Gold Mine.

See “Note 6. Property, Plant and Equipment” to our consolidated financial statements for further details.

Notes Receivable

On September 30, 2010, we had short- and long-term notes receivable, net of discount, of $1,537,944 compared with $1,464,709 at September 30, 2009. The increase related entirely to the amortization of the discount into interest income.

See “Note 8. Notes Receivable” to our consolidated financial statements for further details.

Investments

Our investment portfolio at September 30, 2010, was $132,430, a decrease of $134,508 from the September 30, 2009, balance of $266,938. This decrease was primarily due to falling share prices of the investments in our portfolio and, to a lesser extent, the sale of 250,000 shares of common stock and 1,848 ounces of silver during fiscal 2010. Also contributing to this decrease was a $47,800 other-than-temporary impairment charge we recorded during fiscal 2010.

See “Note 9: Investments” to our consolidated financial statements for further details.

Accounts Payable

Our accounts payable were $242,915 at September 30, 2010, an increase of $83,292 from the September 30, 2009, balance of $159,623. The balance at the end of fiscal 2010 is comprised almost entirely of a payable related to exploratory work being conducted at our Rescue Mine.

Also, during fiscal 2010, we determined that the balance of $69,418 remaining in the accounts payable we assumed with the acquisition of Kimberly Gold Mines, Inc. was not going to be settled. Accordingly, we made an entry to remove the accounts payable and to record cancellation of debt income of $69,418.

See “Note 15: Kimberly Gold Mines, Inc.” to our consolidated financial statements for further details.

Accrued Expenses

Our accrued expenses were $13,022 at September 30, 2010, compared with $79,151 at September 30, 2009. The decrease was primarily due to the fiscal 2009 accrual of $50,000 related a civil action filed by the United States Environmental Protection Agency (EPA). This civil action seeks recovery of funds paid by the EPA in response to alleged releases of hazardous substances at our Idaho Lakeview mine and mill site in Bonner County, Idaho. On August 4, 2010, we paid this liability in full.

See “Note 16: Commitments & Contingencies – Civil Action Filed” to our consolidated financial statements for further details.

Stockholders’ Equity

Our total stockholders’ equity was $5,573,624 at September 30, 2010, a decrease of $141,173 from $5,714,797 at September 30, 2009. The decrease in total stockholders’ equity was primarily due a net loss of $1,111,907 incurred during fiscal 2010. Partially offsetting this negative impact was the issuance of 7,051,550 shares of our common stock to eighteen investors which raised a total of $705,155.

See “Note 9: Investments” to our consolidated financial statements for further details.

Liquidity and Capital Resources

Operating Activities

During fiscal 2010, our operating activities used $796,743 and used $1,587,167 during fiscal 2009. This improvement was primarily the result of the realization of a net loss of $1,779,976 during fiscal 2009 period compared to a net loss of $1,082,328 realized during fiscal 2010.

Investing Activities

During fiscal 2010, our investing activities provided $151,412 and provided $94,370 during fiscal 2009. This increase was primarily our spending only $73,173 on fixed assets during fiscal 2010 compared with $293,351 during fiscal 2009. Also contributing to the improvement was the sale of our North Osburn claims in the Silver Valley to an unrelated party for a total of $175,000 during fiscal 2010 compared with no such income during fiscal 2009. Partially mitigating these positive impacts was the receipt of $452,808 in payments on notes receivable during fiscal 2009 compared with none during fiscal 2010.

Financing Activities

During fiscal 2010, our financing activities provided $677,618 and used $53,703 during fiscal 2009. This was primarily due to net proceeds of $705,155 received from the issuance of common stock during fiscal 2010, compared with none during fiscal 2009.

Off-Balance Sheet Arrangements

The Company is not currently a party to any off-balance sheet arrangements as they are defined in the regulations promulgated by the Securities and Exchange Commission.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

To the Board of Directors and Stockholders
Shoshone Silver Mining Company

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying consolidated balance sheets of Shoshone Silver Mining Company and subsidiaries as of September 30, 2010 and 2009, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for the years ended September 30, 2010 and 2009 and for the period from January 1, 2000 (inception of exploration stage) to September 30, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Shoshone Silver Mining Company and subsidiaries as of September 30, 2010 and 2009, and the results of its operations and its cash flows for the years ended September 30, 2010 and 2009 and for the period from January 1, 2000 (inception of exploration stage) to September 30, 2010 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s accumulated deficit and lack of revenues raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding the resolution of this issue are also discussed in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/BehlerMick PS

BehlerMick PS

Spokane, Washington
December 23, 2010

SHOSHONE SILVER MINING COMPANY
(an Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS

					September 30,			September 30,
					2010			2009

ASSETS

	CURRENT ASSETS
		Cash and cash equivalents		$	55,853		$	23,566
		Note receivable (net of discount) - current portion			-			426,765
		Deposits and prepaids			3,616			4,375
		Supplies inventory			1,957			2,195
			Total Current Assets		61,426			456,901

	PROPERTY, PLANT AND EQUIPMENT
		Property, plant and equipment			3,459,443			3,386,270
		Accumulated depreciation			(1,553,772	)		(1,374,968	)
			Total Property Plant and Equipment		1,905,671			2,011,302

	MINERAL AND MINING PROPERTIES				2,196,369			2,196,369

	OTHER ASSETS
		Notes receivable (net of discount)			1,537,944			1,037,944
		Investments			132,430			266,938
			Total Other Assets		1,670,374			1,304,882

			TOTAL ASSETS	$	5,833,840		$	5,969,454


LIABILITIES AND STOCKHOLDERS' EQUITY

	CURRENT LIABILITIES
		Accounts payable		$	242,915		$	159,623
		Accrued expenses			13,022			79,151
		Notes payable - current portion			4,279			11,615
			Total Current Liabilities		260,216			250,389

		Note payable - noncurrent portion			-			4,268
			Total Liabilities		260,216			254,657

	COMMITMENTS AND CONTINGENCIES				-			-

	STOCKHOLDERS' EQUITY
		Common stock, 200,000,000 shares authorized, $0.10 par value;
		42,659,037 and 34,302,487 shares issued and outstanding			4,265,904			3,430,249
		Additional paid-in capital			4,148,550			4,089,450
		Treasury stock			(206,253	)		(252,653	)
		Accumulated earnings in exploration stage			(916,042	)		126,447
		Accumulated deficit prior to exploration stage			(1,667,482	)		(1,667,482	)
		Accumulated other comprehensive loss			(51,053	)		(11,214	)
			Total Stockholders' Equity		5,573,624			5,714,797

			TOTAL LIABILITIES AND STOCKHOLDERS'
			EQUITY	$	5,833,840		$	5,969,454

The accompanying notes are an integral part of these consolidated financial statements.

SHOSHONE SILVER MINING COMPANY

(an Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)




							Period from
							January 1, 2000
							(beginning of
			Fiscal Year Ended September 30,				exploration stage)
			2010		2009		to September 30, 2010


REVENUES			$	20,111	$	-	$	161,700

COST OF REVENUES				-		-		228,828

GROSS PROFIT				20,111		-		(67,128)

OPERATING EXPENSES
	General and administrative			536,656		491,324		1,211,118
	Professional fees			123,445		286,369		1,182,310
	Depreciation			178,804		130,743		642,843
	Mining and exploration expenses			542,724		841,519		4,235,732
	Net gain on sale of load claim			(175,000)		-		(368,907)
		Total Operating Expenses		1,206,629		1,749,955		6,903,096

LOSS FROM OPERATIONS				(1,186,518)		(1,749,955)		(6,970,224)

OTHER INCOME (EXPENSES)
	Dividend and interest income			73,467		115,022		279,789
	Gain on sale of fixed asset			5,000		-		17,200
	Gain on sale of Mexican mining concession			-		-		4,363,353
	Gain on settlement of note receivable			-		-		64,206
	Interest expense			(4,242)		(2,398)		(11,548)
	Lease income			-		-		444,044
	Loss on abandonment of asset			-		-		(20,000)
	Net gain on sale of investments			1,036		2,225		1,133,469
	Other income (expense)			142		(43,391)		197,349
	Other-than-temporary impairment of investments			(47,800)		(101,479)		(149,279)
	Bad debt recovery			47,008		-		47,008
	Cancellation of debt income			69,418		-		69,418
	Unrealized holding loss on marketable securities			-		-		(380,827)
		Total Other Income (Expenses)		144,029		(30,021)		6,054,182

INCOME (LOSS) BEFORE INCOME TAXES				(1,042,489)		(1,779,976)		(916,042)

INCOME TAXES				-		-		124,826
DEFERRED TAX GAIN				-		-		(124,826)

NET INCOME (LOSS)				(1,042,489)		(1,779,976)		(916,042)

OTHER COMPREHENSIVE INCOME (LOSS)
	Unrealized holding gain (loss) on investments			(39,839)		5,557		(98,853)


NET COMPREHENSIVE INCOME (LOSS)			$	(1,082,328)	$	(1,774,419)	$	(1,014,895)


NET INCOME (LOSS) PER COMMON SHARE, BASIC			$	(0.03)	$	(0.06)

NET INCOME (LOSS) PER COMMON SHARE, DILUTED			$	(0.03)	$	(0.06)

WEIGHTED AVERAGE NUMBER OF
	COMMON STOCK SHARES OUTSTANDING, BASIC			38,982,098		28,478,030

WEIGHTED AVERAGE NUMBER OF
	COMMON STOCK SHARES OUTSTANDING, DILUTED			38,982,098		28,478,030

The accompanying notes are an integral part of these consolidated financial statements.

SHOSHONE SILVER MINING COMPANY

(an Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

							Period from
							January 1, 2000
							(beginning of
			Fiscal Year Ended September 30,				exploration stage)
			2010		2009		to September 30, 2010

CASH FLOWS FROM OPERATING ACTIVITIES
	Net income (loss)		$	(1,042,489)	$	(1,779,976)	$	(916,042)
	Adjustments to reconcile net income (loss) to net
		Adjustment to balance of note receivable		-		(766)		(766)
		Amortization of note receivable discount		(73,235)		(91,573)		(172,581)
		Available-for-sale securities issued in exchange for services		-		-		135,140
		Available-for-sale silver investment issued in exchange for services		3,320		240		3,560
		Bad debt expense		-		9,624		9,624
		Cash used by operations:
		Cancellation of debt income		(69,418)		-		(69,418)
		Common stock issued for mining and exploration expenses		9,000		-		294,500
		Common stock issued for services		200,900		9,900		404,486
		Common stock issued in settlement of agreement with former CEO		-		-		20,000
		Depreciation and amortization expense		201,257		130,743		665,296
		Discount given on early payment on note receivable		-		50,000		50,000
		Gain on sale of fixed asset		(5,000)		-		(17,200)
		Gain on settlement of note receivable		-		-		(64,206)
		Impairment of mining expenses		-		-		413,000
		Loss on abandonment of investment		-		-		20,000
		Loss recognized on other-than-termporary impairment of investments		47,800		101,479		149,279
		Net gain on sale of lode claim		(175,000)		-		(368,907)
		Net gain on sale of Mexican mining concession		-		-		(4,363,353)
		Net loss (gain) on sale of investments		(1,036)		(2,225)		(1,133,469)
		Treasury stock issued for services		26,100		7,000		53,420
		Unrealized holding loss on marketable securities		-		-		380,827
	Changes in assets and liabilities:
		Change in other current assets		-		-		(14,443)
		Change in deposits and prepaids		(5,761)		16,370		21,248
		Change in supplies inventory		238		626		10,775
		Change in accrued interest receivable		-		(9,516)		(20,255)
		Change in accrued liabilities		(66,129)		68,863		9,038
		Change in accounts payable		152,710		(97,956)		161,669
		Change in stock to issue		-		-		230,680
		Net cash used in operating activities		(796,743)		(1,587,167)		(4,108,098)

CASH FLOWS FROM INVESTING ACTIVITIES
		Advances on notes receivable		-		(15,000)		(111,022)
		Advances to related party		-		-		(395,000)
		Issuance of note receviable from related party		-		-		(243,000)
		Payments received on notes receivable		-		452,808		582,846
		Payments received on notes receivable from related party		-		-		332,498
		Proceeds from sale of fixed assets		5,000		-		17,200
		Proceeds from sale of investments		44,585		10,682		4,627,485
		Proceeds from sale of lode claim		175,000		-		188,907
		Proceeds from sale of Mexican mining concession		-		-		2,497,990
		Proceeds from short-term loans		-		-		160,760
		Purchase of fixed assets		(73,173)		(293,351)		(1,080,482)
		Purchase of mineral and mining properties		-		(8,000)		(76,472)
		Purchases of investments		-		(52,769)		(4,059,939)
		Net cash provided by investing activities		151,412		94,370		2,441,771

CASH FLOWS FROM FINANCING ACTIVITIES
		Common shares repurchased for treasury		-		(20,000)		(41,220)
		Net proceeds from sale of common stock		705,155		-		1,947,725
		Payment made on long-term note payable		(27,537)		(33,703)		(264,539)
		Payment of common stock subscriptions		-		-		20,225
		Net cash (used in) provided by financing activities		677,618		(53,703)		1,662,191

Net increase (decrease) in cash				32,287		(1,546,500)		(4,136)

Cash, beginning of period				23,566		1,570,066		59,989

Cash, end of period			$	55,853	$	23,566	$	55,853


SUPPLEMENTAL CASH FLOW DISCLOSURES:
	Interest expense paid		$	2,698	$	2,398	$	10,004
	Income taxes paid		$	-	$	-	$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
	Accounts payable issued in exchange for partial payment on office building		$	-	$	-	$	50,000
	Common stock issued for services, accounts payable, finder's fee and mining & exploration expenses		$	-	$	-	$	539,333
	Common stock issued for purchase of equipment and mining properties		$	-	$	-	$	140,340
	Deposit utilized to purchase fixed asset		$	-	$	-	$	5,000
	Equipment received in exchange for settlement of note recievable		$	-	$	4,139	$	4,139
	Marketable securities received in lieu of note receivable		$	-	$	-	$	104,273
	Mill building acquired in exchange for common stock and other consideration		$	-	$	224,475	$	224,475
	Mineral properties acquired in exchange for common stock and other consideration		$	-	$	1,677,126	$	1,677,126
	Mineral property reacquired upon default		$	-	$	131,553	$	131,553
	Mining equipment acquired in exchange for common stock and other consideration		$	-	$	260,000	$	260,000
	Note issued in exchanged for vehicle, equipment and prepaid asset		$	15,933	$	22,939	$	108,156
	Note receivable (net of discount) in connection with sale of Mexcian Mining Concession		$	-	$	-	$	1,865,363
	Note receivable in connection with sale of lode claim		$	-	$	-	$	120,000
	Office equipment acquired in exchange for common stock and other consideration		$	-	$	15,525	$	15,525
	Stock received in exchange for lode claim		$	-	$	-	$	60,000
	Treasury stock acquired through sale of investment		$	-	$	-	$	296,296
	Treasury stock issued in exchange for fixed asset		$	-	$	7,500	$	7,500

The accompanying notes are an integral part of these consolidated financial statements.

SHOSHONE SILVER MINING COMPANY

(an Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

	Common Stock												Accumulated		Other		Total
	Number				Additional		Treasury				Subscriptions		Accumulated		Comprehensive		Stockholders'
	of Shares		Amount		Paid-in Capital		Stock		Stock Options		Receivable		Deficit		Income		Equity

Balance December 31, 1999 as originally stated	9,030,660	$	903,066	$	1,597,425	$	(65,733)	$	-	$	-	$	21,834	$	-	$	2,456,592

Net adjustments for the following:

Overstated mining property investments	-		-		-		-		-		-		(905,981)		-		(905,981)

Understated property, net of depreciation	-		-		990,000		-		-		-		(345,465)		-		644,535

Repaid loan incorrectly written off to expenses	-		-		-		-		-		-		50,000		-		50,000

Treasury stock, not properly recognized	533,669		53,367		-		-		-		-		(53,367)		-		-

Stock issuances not recorded	410,000		41,000		48,500		-		-		-		(89,500)		-		-

Stock options and payables for unrecorded attorney fees	-		-		-		-		12,221		-		(22,221)		-		(10,000)

Cost of mining properties expensed	-		-		-								(491,282)				(491,282)

Note receivable not recorded, net of accrued interest	-		-		-		-		-		-		168,500		-		168,500

Balance December 31, 1999, as restated	9,974,329	$	997,433	$	2,635,925	$	(65,733)	$	12,221	$	-	$	(1,667,482)	$	-	$	1,912,364

Issuance of stock for services at a price of $0.20 per share	5,000		500		500		-		-		-		-		-		1,000

Net loss for year ending December 31, 2000	-		-		-		-		-		-		(212,048)		-		(212,048)

Balance, December 31, 2000, as restated	9,979,329	$	997,933	$	2,636,425	$	(65,733)	$	12,221	$	-	$	(1,879,530)	$	-	$	1,701,316

Net loss for year ending December 31, 2001	-		-		-		-		-		-		(228,159)		-		(228,159)

Balance, January 1, 2002	9,979,329	$	997,933	$	2,636,425	$	(65,733)	$	12,221	$	-	$	(2,107,689)	$	-	$	1,473,157

Treasury stock issued for services at a price of $0.10 per share	-		-		(1,080)		11,880		-		-				-		10,800

															Accumulated
	Common Stock														Other		Total
	Number				Additional		Treasury				Subscriptions		Accumulated		Comprehensive		Stockholders'
	of Shares		Amount		Paid-in Capital		Stock		Stock Options		Receivable		Deficit		Income		Equity
Treasury stock issued for services at a price of $0.10 per share	-		-		(195)		495		-		-				-		300

Issuance of stock for services at a price of $0.03 per share	800,000		80,000		(53,066)		-		-		-				-		26,934

Issuance of stock for legal fees at a price of $0.10 per share	100,000		10,000		-		-		-		-				-		10,000

Net loss for year ending December 31, 2002	-		-		-		-		-		-		(641,951)		-		(641,951)

Balance, January 1, 2003	10,879,329	$	1,087,933	$	2,582,084	$	(53,358)	$	12,221	$	-	$	(2,749,640)	$	-	$	879,240

Stock issued for cash at $0.03 per share	2,902,778		290,278		(204,278)		-		-		-				-		86,000

Issuance of stock for services at a price of $0.10 per share	620,833		62,083		-		-		-		-				-		62,083

Issuance of stock for mining properties at a price of $0.15 per share	510,000		51,000		25,500		-		-		-				-		76,500

Stock issued for cash at $0.10 per share	119,000		11,900		-		-		-		-				-		11,900

Unrealized holding gain in investments	-		-		-		-		-		-				1,328,462		1,328,462

Net loss for year ending December 31, 2003	-		-		-		-		-		-		(99,292)		-		(99,292)

Balance, December 31, 2003	15,031,940	$	1,503,194	$	2,403,306	$	(53,358)	$	12,221	$	-	$	(2,848,932)	$	1,328,462	$	2,344,893

Stock issued for cash and warrants at $0.35 per share, net of costs of $64,465	1,861,857		186,186		400,999		-		-		-				-		587,185

Issuance of stock for services at an average price of $0.14 per share	25,000		2,500		1,000		-		-		-				-		3,500

Issuance of stock for services at price of $0.35 per share	25,000		2,500		6,250		-		-		-				-		8,750

Issuance of stock for mining property lease at a price of $0.35 per share	350,000		35,000		87,500		-		-		-				-		122,500

Issuance of stock for mining properties at a price of $0.35 per share	100,000		10,000		25,000		-		-		-				-		35,000

Treasury stock issued for mining properties at a price of $0.35 per share	-		-		24,000		11,000		-		-				-		35,000

															Accumulated
	Common Stock														Other		Total
	Number				Additional		Treasury				Subscriptions		Accumulated		Comprehensive		Stockholders'
	of Shares		Amount		Paid-in Capital		Stock		Stock Options		Receivable		Deficit		Income		Equity

Treasury stock issued for subscriptions receivable at a price of $0.35 per share	-		-		9,101		11,124		-		(20,225)				-		-

Treasury stock issued for services at a price of $0.35 per share	-		-		9,600		4,400		-		-				-		14,000

Unrealized holding loss in investments	-		-		-		-		-		-				(594,605)		(594,605)

Net loss for year ending December 31, 2004	-		-		-		-		-		-		(567,085)		-		(567,085)

Balance, December 31, 2004	17,393,797	$	1,739,380	$	2,966,756	$	(26,834)	$	12,221	$	(20,225)	$	(3,416,017)	$	733,857	$	1,989,138

Issuance of stock for accounts payable at a price $0.35 per share	650,000		65,000		162,500		-		-		-		-		-		227,500

Issuance of stock for mining property expenses at a price $0.20 per share	100,000		10,000		10,000		-		-		-		-		-		20,000

Treasury stock issued for services at a price of $0.20 per share	-		-		4,950		6,050		-		-		-		-		11,000

Treasury stock issued for cash and services at price of $0.10 per share	-		-		(1,900)		20,900		-		-		-		-		19,000

Treasury stock acquired by sale of investments	-		-		-		(296,296)		-		-		-		-		(296,296)

Receipt of subscription receivable	-		-		-		-		-		1,381		-		-		1,381

Unrealized holding loss in investments	-		-		-		-		-		-		-		(601,560)		(601,560)

Net loss for year ending December 31, 2005	-		-		-		-		-		-		(84,681)		-		(84,681)

Balance, December 31, 2005	18,143,797	$	1,814,380	$	3,142,306	$	(296,180)	$	12,221	$	(18,844)	$	(3,500,698)	$	132,297	$	1,285,482

Issuance of stock for exploration expenses at a price $0.24 per share	100,000		10,000		14,000		-		-		-		-		-		24,000

Treasury stock issued for services at an average price of $0.25 per share	-		-		(5,164)		25,484		-		-		-		-		20,320

Unrealized holding gain on investments	-		-		-		-		-		-		-		470,528		470,528

Net income for year ending December 31, 2006	-		-		-		-		-		-		367,135		-		367,135

Balance, December 31, 2006	18,243,797	$	1,824,380	$	3,151,143	$	(270,696)	$	12,221	$	(18,844)	$	(3,133,563)	$	602,825	$	2,167,465

															Accumulated
	Common Stock														Other		Total
	Number				Additional		Treasury				Subscriptions		Accumulated		Comprehensive		Stockholders'
	of Shares		Amount		Paid-in Capital		Stock		Stock Options		Receivable		Deficit		Income		Equity

Expiration of stock options	-		-		12,221		-		(12,221)		-		-		-		-

Stock issued for cash at $0.18 per share, net of costs of $18,000	1,000,000		100,000		62,000		-		-		-		-		-		162,000

Stock issued for cash at $0.20 per share	200,000		20,000		20,000		-		-		-		-		-		40,000

Stock issued for cash at $0.20 per share	250,000		25,000		25,000		-		-		-		-		-		50,000

Issuance of stock for exploration expenses at a price of $0.27 per share	100,000		10,000		17,000		-		-		-		-		-		27,000

Issuance of stock in exchange for services	6,000		600		1,320		-		-		-		-		-		1,920

Adjustments to common stock and treasury stock to adjust to actual. See Note 2.	47,382		4,739		16,388		(21,127)		-		-		-		-		-

Receipt of subscription receivable	-		-		-		-		-		18,844		-		-		18,844

Issuance of treasury stock for expenses incurred in the prior year	-		-		3,190		3,190		-		-		-		-		6,380

Unrealized holding gain on investments	-		-		-		-		-		-		-		(419,483)		(419,483)

Net income for the year ending December 31, 2007	-		-		-		-		-		-		(272,854)		-		(272,854)

Balance, December 31, 2007	19,847,179	$	1,984,719	$	3,308,262	$	(288,633)	$	-	$	-	$	(3,406,417)	$	183,342	$	1,781,272

Issuance of stock in exchange for services	12,000		1,200		1,200		-		-		-		-		-		2,400

Stock issued for cash at $0.20 per share, net of costs of $10,000	350,000		35,000		25,000		-		-		-		-		-		60,000

Unrealized holding gain on investments	-		-		-		-		-		-		-		-		-

Stock issued for cash at $0.20 per share, net of costs of $4,016	450,000		45,000		40,984		-		-		-		-		-		85,984


Stock issued for cash at $0.20 per share	250,000		25,000		25,000		-		-		-		-		-		50,000

Issuance of stock for exploration expenses at a price of $0.22 per share	100,000		10,000		12,000		-		-		-		-		-		22,000

Stock issued in exchange for heavy equipement	454,000		45,400		49,940		-		-		-		-		-		95,340

Stock issued for cash at $0.20 per share	250,000		25,000		25,000												50,000

										Accumulated
	Common Stock									Other		Total
	Number				Additional	Treasury		Subscriptions	Accumulated	Comprehensive		Stockholders'
	of Shares		Amount		Paid-in Capital	Stock	Stock Options	Receivable	Deficit	Income		Equity

Stock issued for cash at $0.20 per share	250,000		25,000		25,000							50,000

Stock issued in settlement of an agreement with the Company's former CEO	100,000		10,000		10,000							20,000

Acquisition of 50,000 shares of treasury stock at $0.12 per share						(6,100)						(6,100)

Acquisition of 126,000 shares of treasury stock at $0.12 per share						(15,120)						(15,120)

Unrealized holding gain on investments	-		-		-	-	-	-	-	(200,114)		(200,114)

Net income for nine-month period ended September 30, 2008	-		-		-	-	-	-	3,645,358	-		3,645,358
	22,063,179		2,206,319		3,522,386	(309,853)	-	-	238,941	(16,772)		5,641,021

Common stock issued at $0.10 per share in exchange for services	10,000		1,000		-	-	-	-	-	-		1,000

Common stock Issued at $0.11 per share in exchange for services	50,000		5,000		500	-	-	-	-	-		5,500

50,000 shares of treasuary stock issued at $0.11 per share in exchange for Equipment	-		-		2,000	5,500	-	-	-	-		7,500

Common stock issued at $0.15 per share to acquire 100% of the common stock of Kimberly Gold Mines, Inc	12,145,306		1,214,530		607,264	-	-	-	-	-		1,821,794

100,000 shares treasuary stock repurchased at $0.20 per share	-		-		-	(20,000)	-	-	-	-		(20,000)

70,000 shares of treasury stock issued at 0.10 per share in exchange for services					(700)	7,700	-	-	-	-		7,000

200,000 shares of treasury stock issued at $0.08 per share in connection with acquisition of Kimberly Gold Mines, Inc.	-		-		(42,000)	64,000	-	-	-	-		22,000

Common stock issued at $0.10 per share in exchange for directors services	20,000		2,000		-	-	-	-	-	-		2,000

Common stock issued at $0.10 per share in exchange for services	4,000		400		-	-	-	-	-	-		400

Common stock issued at $0.10 per share in exchange for directors services	10,000		1,000		-	-	-	-	-	-		1,000

Reconciliation adjustment to common stock	2		-		-	-	-	-	-	-		-

Unrealized holding gain on investments	-		-		-	-	-	-	-	5,558		5,558

Net income for twelve-month period ended September 30, 2009	-		-		-	-	-	-	-	-		(1,779,976)
	34,302,487		3,430,249		4,089,450	(252,653)	-	-	(1,541,035)	(11,214)		5,714,797


Common stock issued for cash at $0.10 per share	7,051,550		705,155		-	-	-	-	-	-		705,155

Common stock issued at $0.18 per share in exchange for services	5,000		500		400	-	-	-	-	-		900

Common stock issued to Board of Directors at $0.16 per share	1,250,000		125,000		75,000	-	-	-	-	-		200,000

Common stock issued in exchange for lease payment on mining property	50,000		5,000		4,000	-	-	-	-	-		9,000

Treasury stock issued in exchange for services at $0.18 per share	-		-		(20,300)	46,400	-	-	-	-		26,100

Unrealized holding gain on investments	-		-		-	-	-	-	-	(39,839)		(39,839)

Net income for twelve-month period ended September 30, 2010	-		-		-	-	-	-	(1,042,489)	-		(1,042,489)
	42,659,037	$	4,265,904	$	4,148,550	$(206,253)	$-	$-	$(2,583,524)	$(51,053)	$	5,573,624

The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS

Shoshone Silver Mining Company (an Exploration Stage Company) (“the Company” or “Shoshone”) was incorporated under the laws of the State of Idaho on August 4, 1969, under the name of Sunrise Mining Company and was engaged in the business of mining. On January 22, 1970, the Company's name was changed to Shoshone Silver Mining Company. During 2003, the Company’s focus broadened to include resource management and sales of mineral and timber interests.

Beginning in fiscal 2000, the Company entered into an exploration stage. The Company has acquired several mining properties since entering the exploration stage.

The Company’s year-end is September 30^th.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Accounting Methods

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Cash and Cash Equivalents

For purposes of its statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents also include money market accounts.

Concentration of Credit Risk

The Company maintains its cash in several commercial accounts at major financial institutions and brokerage houses. The brokerage accounts contain cash and securities. Balances are insured up to $500,000 (with a limit of $100,000 for cash) by the Securities Investor Protection Corporation (SIPC). At September 30, 2010 and September 30, 2009, the Company’s cash balances did not exceed Federal Deposit Insurance Corporation (FDIC) or SIPC limits.

Earnings Per Share

The provisions of Topic 260 in the Accounting Standards Codification (ASC 260) which provides the guidance for the calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share.

At September 30, 2010, there were 7,051,550 common stock warrants outstanding which were not included in the calculation of earnings (loss) per share at September 30, 2010, because they would have been anti-dilutive.

At September 30, 2009, there were 725,000 common stock warrants outstanding which were not included in the calculation of earnings (loss) per share at September 30, 2009, because they would have been anti-dilutive.

Fair Value of Financial Instruments

The Company's financial instruments as defined in Topic 825 in the Accounting Standards Codification (ASC 825) include cash and cash equivalents, deposits and prepaid expenses, supplies inventory, investments in available-for-sale securities and silver bars and coins, accounts payable and short-term borrowings. All instruments other than the investments in available-for-sale securities and silver bars and coins are accounted for on an historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at the reporting dates. Investments in available-for-sale securities and silver bars and coins are recorded at fair value at the reporting dates in accordance with ASC Topic 825.

Fair Value Measurements

Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:

Level 1 inputs — Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.

Level 2 inputs — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs — Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

Investments in available-for-sale securities and investments in silver coins and bars are reported at fair value utilizing Level 1 inputs. For these investments, the Company obtains fair value from active markets.

The Company’s Note Receivable (net of discount) is reported at fair value utilizing Level 2 inputs. The discounting of this note receivable utilized interest rates. See Note 8.

The following table presents information about the Company’s assets measured at fair value on a recurring basis as of September 30, 2010, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.

				Fair Value Measurements
				At September 30, 2010, Using
				Quoted Prices
				In Active		Other		Significant
				Markets for		Observable		Unobservable
		Fair Value		Identical Assets		Inputs		Inputs
Description		Sept. 30, 2010		(Level 1)		(Level 2)		(Level 3)
Investments	$	132,430	$	132,430	$	-	$	-
Note Receivable (net of discount)		1,537,944		-		1,537,944		-
Total Assets Measured at Fair Value	$	1,670,374	$	132,430	$	1,537,944	$	-

Fiscal Periods

References to a fiscal year refer to the calendar year in which such fiscal year ends.

Going Concern

As shown in the accompanying financial statements, the Company has limited cash and limited revenues and incurred an accumulated deficit of $2,583,524 from inception through September 30, 2010. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management intends to seek additional capital from new equity securities offerings that will provide funds needed to increase liquidity and fully implement its business plan. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Historically, the Company has generally funded its operations with proceeds from the sale of marketable securities, royalty and option agreement payments, and from the sale of the Company’s common stock. Should the Company be unable to raise capital through any of these avenues, its business, financial position, results of operations and cash flow will likely be materially adversely impacted. As such, substantial doubt as to the Company’s ability to continue as a going concern remains as of the date of these financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. An estimated $1,000,000 is believed necessary to continue operations and increase development through the next twelve months. Currently, the Company anticipates raising the majority of the $1,000,000 through the issuance of common stock to private investors. The timing and amount of capital requirements will depend on a number of factors, including demand for products and services, capital expenditures and revenues generated.

Investments

The Company accounts for marketable securities and investments in silver bars and coins (excluding Shoshone logo coins held as inventory for resale) in accordance with the provisions of ASC Topic 320. Under ASC Topic 320, debt securities and equity securities that have readily determinable fair values are to be classified in three categories:

Held to Maturity – the positive intent and ability to hold to maturity. Amounts are reported at amortized cost, adjusted for amortization of premiums and accretion of discounts.

Trading Securities – bought principally for purpose of selling them in the near term. Amounts are reported at fair value, with unrealized gains and losses included in earnings.

Available for Sale – not classified in one of the above categories. Amounts are reported at fair value, with unrealized gains and losses excluded from earnings and reported separately as a component of stockholders’ equity.

At this time, the Company classifies both marketable securities and investments in silver bars and coins as available for sale. See Note 9.

Investment securities are reviewed for impairment in accordance with ASC 320-10 Investments - Debt and Equity Securities. The Company periodically reviews our investments for indications of other-than-temporary impairment considering many factors, including the extent and duration to which a security's fair value has been less than its cost, overall economic and market conditions, and the financial condition and specific prospects for the issuer. Impairment of investment securities results in a charge to income when a market decline below cost is other-than-temporary.

Mining Properties, Land and Water Rights

Costs of acquiring and developing mining properties, land and water rights are capitalized as appropriate by project area. Exploration and related costs and costs to maintain mining properties, land and water rights are expensed as incurred while the property is in the exploration and evaluation stage. Development and related costs and costs to maintain mining properties, land and water rights are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production basis over proven and probable reserves. Mining properties, land and water rights are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, a gain or loss is recognized and included in the consolidated statement of operations. See Note 7.

Mineral Exploration and Development Costs

All exploration expenditures are expensed as incurred. Significant property acquisition payments for active exploration properties are capitalized. If no economic ore body is discovered, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basis over proven and probable reserves.

Should a property be abandoned, its capitalized costs are charged to operations. The Company charges to the consolidated statement of operations the allocable portion of capitalized costs attributable to properties sold. Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area. See Note 7.

Notes Receivable

The Company’s policy for notes receivable is to continue accruing interest income until it becomes likely that the note is uncollectible. At that time, an allowance for bad debt would be established and interest would stop accruing.

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of the Company and its one wholly owned subsidiary, Lakeview Consolidated Silver Mines, Inc. The inter-company accounts and transactions are eliminated upon consolidation.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment begins on the date the asset is place in service and is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to thirty-one and one half years. See Note 6.

Provision for Taxes

Topic 740 in the Accounting Standards Codification (ASC 740) prescribes recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At September 30, 2010, the Company had taken no tax positions that would require disclosure under ASC 740.

Pursuant to ASC 740, income taxes are provided for based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by ASC 740 to allow recognition of such an asset.

The significant components of the deferred tax assets at September 30, 2010 and September 30, 2009 were as follows:

		September 30,			September 30,
		2010			2009
Deferred Tax Assets
Net operating loss carry-forward	$	858,087		$	456,870
Recognized impairment of investments		16,252			34,503
Net deferred tax assets		874,339			491,373

Deferred Tax Liabilities
Installment income		(605,323	)		(605,323	)
Depreciation		(19,919	)		(2,794	)
Net deferred tax liabilities		(625,242	)		(608,118	)

Net deferred tax assets (liabilities)	$	249,096		$	(116,745	)

Valuation allowance		(249,096	)		116,745
Net deferred tax assets (liabilities)	$	-		$	-

As management of the Company cannot determine that it is more likely than not that the Company will realize the cost of the deferred tax liability, valuation allowances equal to both the deferred tax liability and deferred tax asset have been established at September 30, 2010. At September 30, 2010 and September 30, 2009, the Company had net operating loss carry-forwards of approximately $2,525,000 and $1,344,000, respectively, which expire in the years 2024 through 2030.

At September 30, 2010, the Company had a total deferred tax liability of $625,242. Of this amount $605,323 represents the total estimated taxes payable on the income from the note receivable on the sale of Bilbao concessions that is recognized under the full accrual method for financial statement purposes and the installment sale method for income tax purposes. See Note 8.

At September 30, 2010, the Company has a total deferred tax asset of $874,339. Of this amount $16,252 represents impairment charge on available-for-sale securities recognized for financial reporting purposes in according with ASC 820. For income tax purposes, gain or loss recognized upon the disposition of the security will be recognized in the year of disposition. The remaining $858,087 relates to the Company’s net operating loss carry-forward of $2,525,000.

Recently Adopted Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update No. 2010-01 which clarifies that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend for purposes of applying ASC Topics 505 and 260 (Equity and Earnings Per Share). The amendments in Update 2010-01 are effective for interim and annual period ending on or after December 15, 2009, and should be applied on a prospective basis. The Company adopted the amendments in Update No. 2010-01 without a material effect on its results of operations and financial position.

In January 2010, the FASB issued Accounting Standards Update No. 2010-06 which provides amendments to ASC Topic 820 that will provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2, and 3. The new disclosures and clarifications of existing disclosures are effective of interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those years. The Company does not expect that the adoption of Update No. 2010-06 will have a material effect on its results of operations and financial position.

In February 2010, the FASB issued Accounting Standards Update No. 2010-09 which amended guidance on subsequent events. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and the Company adopted the amendments in Update No. 2010-09 without a material effect on its results of operations and financial position.

Reclamation and Remediation

Expenditures for ongoing compliance with environmental regulations that relate to current operations are expensed or capitalized as appropriate. Expenditures resulting from the remediation of existing conditions caused by past operations that do not contribute to future revenue generations are expensed. Liabilities are recognized when environmental assessments indicate that remediation efforts are probable and the costs can be reasonably estimated.

Estimates of such liabilities are based upon currently available facts, existing technology and presently enacted laws and regulations taking into consideration the likely effects of inflation and other societal and economic factors, and include estimates of associated legal costs. These amounts also reflect prior experience in remediating contaminated sites, other companies’ clean-up experience and data released by The Environmental Protection Agency or other organizations. Such estimates are by their nature imprecise and can be expected to be revised over time because of changes in government regulations, operations, technology and inflation. Recoveries are evaluated separately from the liability and, when recovery is assured, the Company records and reports an asset separately from the associated liability.

Reclassifications

Certain previously reported amounts have been reclassified to conform to the current presentation. In particular, expenses totaling approximately $570,000 that were previously classified as general and administrative expenses on the Consolidated Statement of Operations in fiscal 2009 have been reclassified as mining and exploration expenses. This reclassification was done to align the Company’s external reporting with its internal reporting.

Revenue Recognition

The Company generates limited income from the sale of silver concentrate produced at its Lakeview mill facility from previously stockpiled ore. During the fiscal 2010, the Company generated $20,111 from the sale of its ore concentrate. The Company recognizes income from the sale of silver concentrate when the concentrate is processed.

To a lesser extent, the Company generates income from timber sales, sales of “Company logo” silver medallions and the processing of ore for other companies. The Company recognizes income from timber sales at the time payment for the timber is received. The Company recognizes income from the sales of “Company logo” silver medallions when the coins are shipped to the customer. The Company recognizes income from the processing of ore for other companies when the ore has been processed. The net income from these sources are included under the caption “Other Income (Expense)” on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

Treasury Stock

The Company accounts for its treasury stock under the cost method. Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account (i.e., treasury stock). The equity accounts that were credited for the original share issuance (i.e., common stock, additional paid-in capital, etc.) remain intact. When the treasury shares are reissued, proceeds in excess of cost are credited to a paid-in capital account. See Note 12.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of Shoshone’s financial position and results of operations.

NOTE 3: ACCOUNTS RECEIVABLE FROM RELATED PARTY

On November 4, 2008, the Company purchased silver coins and bars as well as various dies for making coins from a related party. The cost to the Company of the silver and the dies was $56,452. However, the Company paid $110,000 and has recorded a receivable from the related party of $53,548. The Company’s Chairman is also a member of the board of directors of this related party. On March 3, 2009, this related party filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Idaho. During 2009, based on this filing, the Company created an allowance for this receivable in the amount of $53,548.

In September 2010, the Company received a payment of $47,008 on this receivable.

NOTE 4: DEPOSITS AND PREPAID EXPENSES

In December 2009, the Company purchased for $21,694 a one-year liability insurance policy covering its Lakeview mill (the “Policy”). The Policy was purchased with a cash payment of $5,761 with the balance of $15,933 settled with a promissory note. The Company recorded prepaid insurance of $21,694 and a related entry to record a $15,933 note payable. During the twelve-month period ended September 30, 2010, $18,080 of this prepaid insurance was amortized into General & Administrative Expenses. See Note 10.

NOTE 5: SUPPLIES INVENTORY

During 2004, the Company purchased 500 one troy ounce silver medallions with the Company’s logo for $5,303. This purchase was recorded as supplies inventory and the medallions are expected to be used substantially for marketing purposes. At September 30, 2010, the Company had 185 coins remaining in inventory with an historical cost basis of $1,957.

NOTE 6: PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation begins on the date an asset is placed in service using the straight-line method over the asset’s estimated useful life.

The useful lives of property, plant and equipment for purposes of computing depreciation are three to thirty-one and one-half years. The following is a summary of property, equipment, and accumulated depreciation at September 30, 2010 and September 30, 2009:

	September 30,
		2010			2009
Administrative:
Building	$	167,129		$	150,000
Equipment		652,156			652,056
Furniture		12,000			12,000
		831,285			814,056
Lakeview:
Building		56,255			56,255
Equipment		393,687			388,311
Furniture		1,539,282			1,539,282
		1,989,224			1,983,848
Warren:
Building		378,934			328,366
Equipment		260,000			260,000
		638,934			588,366
Total		3,459,443			3,386,270
Less: Accumulated Depreciation		(1,553,772	)		(1,374,968	)
Property, Plant & Equipment, net	$	1,905,671		$	2,011,302

Depreciation expense was $178,804 for fiscal 2010, and $130,743 for fiscal 2009.

Equipment with a combined carrying amount of $16,778 serves as collateral for notes payable. See Note 10.

During fiscal 2010, the Company sold for $5,000 equipment that had been fully depreciated. The $5,000 is presented under the caption “Gain from the sale of fixed assets” on the Company’s Consolidated Statements of Operations.

The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts.

Maintenance and repairs are expensed as incurred. Replacements and betterments are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.

NOTE 7: MINERAL AND MINING PROPERTIES

The Company currently has interests in 317 properties or claims, which are the primary focus of operations.

Northwestern United States

Silver Valley, Idaho

Shoshone Group

This mineral property grouping owned by the Company consists of 5 patented lode mining claims covering 96 acres situated in the St. Joe Mining District, Shoshone County, Idaho. The 5 patented claims were acquired in 1970 from an outside party for $2,500 in cash and 100,000 shares of common stock. The cost of the property, $17,500, was expensed in prior years as an exploration expense.

Bullion Group

This mineral property group acquired by the Company in 1998 consists of 7 patented mining claims covering 138 acres. The cost of the property was included as an exploration expense in a prior year.

North Osburn

The Company owned a group of 15 unpatented properties known as the North Osburn Group located within the Silver Valley in Shoshone County, Idaho. During fiscal 2010, the Company received $175,000 related to the sale of these claims to an unrelated party. Since the Company had previously expensed the approximately $10,000 cost to acquire and maintain this property, the entire proceeds of $175,000 were accounted for as gain and presented under the caption “Net gain on the sale of lode claim” on the Company’s Consolidated Statements of Operations.

Camp Project

The Company has leased 35 patented lode claims totaling 630 acres in the Coeur d’Alene Mining District. These claims were leased from Merger Mines Corporation for 15 years on December 14, 2009 for consideration of Shoshone common stock, a net smelter return, and annual advance royalty payments.

Lakeview District, Idaho

Idaho Lakeview, Keep Cool Group and Weber Group

The Company acquired the Lakeview and Keep Cool mining properties consisting of 9 patented and 14 unpatented lode claims through the issuance of 3,126,700 shares of its common stock during 1985. The total cost of the properties, $334,690, is included in the financial statements under mining properties.

During 2006, the Company made improvements to the land to be more accessible as well as usable. The total cost of the $68,472 was capitalized. This amount is a component of the total cost of the properties of $334,690 discussed above.

In 1999, the Company acquired, for 100,000 shares of its common stock, 6 patented and 10 unpatented lode mining claims located in the Lakeview Mining District, Bonner County, Idaho. In addition, $125 cash was paid and 100 shares of common stock were issued to acquire a pit fraction within the same location. The cost of the property, $125,000, was expensed in prior years as an exploration expense.

Auxer Mine

The Auxer Mine, consisting of 2 unpatented claims covering 40 acres, was acquired by the Company in 2003 for 50,000 shares of common stock. The cost of the property, $7,500, is included in the financial statements under mining properties until such time as the Company’s outside study on the property’s reserves, if any, is completed.

Talache Group The Company acquired, for 150,000 shares of its common stock, 2 unpatented lode mining claim covering 40 acres during 2003. The cost of the former mining property, $22,500, is included in the financial statements under Mining Properties until such time as the Company’s outside study on the related property’s reserves, if any, is completed.

Regal Mine

The Company acquired, for 100,000 shares of its common stock, four contiguous unpatented lode mining claims covering 80 acres located in the Moyie-Yaak Mining District of Boundary County, Idaho during 2003. The cost of the former mining property, $15,000, is included in the financial statements under Mining Properties until such time as the Company’s outside study on the related property’s reserves, if any, is completed.

Conjecture

During 2004, the Company entered into a 25-year lease agreement for 13 unpatented lode mining claims and six patented lode mining claims in Bonner County. Yearly lease payments on the property were 100,000 shares of common stock.

In April 2010, the Company cancelled the lease agreement and, under the terms of the agreement, paid to the lessor 50,000 shares of its common stock (valued at $9,000) and a royalty fee $259.

Warren District, Idaho

Rescue Gold Mine

The Company holds 82 unpatented mining claims and 2 unpatented mill-site claims covering 1,720 acres in central Idaho. There is a 120 ton per day mill complete with a Knelson Gold Concentrator on the mill-site claims.

Iola Claims

The Company leases 5 patented mining claims in central Idaho covering 70 acres.

Silver King Claims

The Company leases 12 patented mining claims in central Idaho covering 174 acres.

Marshall Mountain District, Idaho

Kimberly Gold Mine

The Company holds 24 unpatented mining claims covering 480 acres in central Idaho. The mine consists of 10 separate tunnels which explore 8,798 feet of previously producing workings.

Other North Idaho and Montana

Montgomery Mine Group

During the fiscal year ended December 31, 2005, the Company acquired, for $43,557 in cash, 25 unpatented lode mining claims covering 500 acres located in Boundary County, Idaho. The cost of the properties was expensed in prior years as an exploration expense.

Stillwater Extension Claims

The Company acquired, for 100,000 shares of its common stock, ten unpatented lode mining claims covering 200 acres located along the J-M Reef of the Stillwater Complex of south central Montana during 2003. The cost of the properties, $15,000, has been expensed in prior years as an exploration expense.

Princeton Gulch Claims

During 2006, the Company made a partial payment of $13,000 toward the purchase of four unpatented placer claims and two unpatented lode claims. These claims in aggregate cover 120 acres and are located in Granite County, Montana. The payment of $13,000 was included in exploration expenses during 2006.

Drumheller Group

The Company owned six patented claims consisting of 111 acres which are adjoining and lying south of the Idaho Lakeview claims on an extension of the Hewer vein. The Company issued 109,141 shares of its common stock to acquire these claims in February 1984.

Wenatchee District, Washington

Shaft Claims

The Company holds 19 unpatented mining claims covering 380 acres in central Washington. The claims are located within the heart of the Wenatchee Gold Belt.

Southwestern United States

Western Gold

The Company acquired, for 100,000 shares of stock, 13 unpatented lode mining claims covering 240 acres located in the Oatman Mining District of Mojave County, Arizona during 2003. The cost of the properties, $15,000, has been expensed in prior years as an exploration expense.

Gold Road Claims

The Company acquired, for 10,000 shares of stock, 16 unpatented lode mining claims covering 320 acres located in Mohave County, Arizona during 2003. The cost of the properties, $1,500, has been expensed in prior years as an exploration expense.

Cerro Colorado Group

During 2004, the Company acquired three unpatented lode claims covering 60 acres located in the Cerro Colorado Mining District of Pima County, Arizona. The cost of the properties, $1,500, has been expensed in prior years as an exploration expense.

Mexico Properties

Sonora Mexico Mining Properties

Shoshone has an interest in several other Mexican exploration projects which the Company does not currently consider to be material.

NOTE 8: NOTES RECEIVABLE

Mexican Concessions

On August 11, 2008, the Company sold 100% of the common stock of its wholly owned subsidiary in Mexico, Shoshone Mexico, S.A. de C.V, to Xtierra Resources, Ltd (“Xtierra”). The Company’s interest in the Bilbao concessions in Zacatecas, Mexico was included in this sale. In exchange for its interest in the Bilbao concessions the Company received net proceeds of $2,497,990 and a non-interest bearing note receivable for $2,500,000.

The note does not bear interest and a discounted payment of $450,000 was made in July 2009. The remaining balance of $2,000,000 is to be paid in four consecutive equal annual installments to begin at the time of the commencement of construction of any mine developed on the Bilbao concessions but in any event will be due and payable no later than August 11, 2019.

Since the note does not bear interest, the Company imputed interest at a rate of 5%. Accordingly the Company recorded a note discount of $634,637. During fiscal 2010 and 2009, $73,235 and $91,573, respectively, of interest income was realized through the amortization of this note discount.

The balance on this note receivable (net of discount) was $1,537,944 at September 30, 2010.

NOTE 9: INVESTMENTS

The Company has invested in marketable securities and in silver coins and bars and accounts for these as available-for-sale. Amounts are reported at fair value as determined by quoted market prices, with unrealized gains and losses excluded from earnings and reported separately as a component of stockholders’ equity. The cost of securities sold is based on the specific identification method.

Unrealized gains and losses are recorded on the statements of operations as other comprehensive income (loss) and on the balance sheet as other accumulated comprehensive income.

The following summarizes the investments at September 30, 2010:


					Market
Investment	Quantity		Cost		Value

Available for Sale Securities:
Bayswater Uranium Corporation	20,000	$	12,200	$	12,200
Chester Mining Company	2,500		1,125		1,850
Gold Crest Mines	567,600		975		9,649
Lucky Friday Extension	5,000		250		250
Merger Mines	729,299		103,885		36,465
Metropolitan Mines Limited	6,000		360		720
New Jersey Mining	142,875		34,290		32,861
Vindicator Mines	88,000		17,600		10,560
Subtotal	1,561,274		170,685		104,555

Silver Coins & Bars	1,267		12,936		27,874

Total at September 30, 2010	1,562,541	$	183,621	$	132,429

The Company had an unrealized holding loss during the fiscal year ended September 30, 2010 of $87,640. This is recorded on the statements of operations as other comprehensive income (loss) and included on the balance sheet in other accumulated comprehensive income.

The Company recognized $1,036 of net gain previously included in accumulated other comprehensive income on the sale of investments during the fiscal year ended September 30, 2010.

At September 30, 2010, the Company determined that certain of its available-for-sale securities had experienced an impairment that was other-than-temporary. Key factors used in determining whether or not the impairment was other-than-temporary included the length of time and the extent to which the market value of the securities had been below their cost. In connection with this determination, the Company recognized an impairment charge of $47,800. This impairment charge is presented under the caption “Other-than-temporary impairment of investments” on the Company’s Consolidated Statements of Operations.

The following table presents certain details related to investments for which the Company determined the impairment was other-than-temporary:

					Market
	# of				Value		Recognized
Investment	Shares		Cost		at 9/30/10		Impairment
Bayswater Uranium Corporation	200,000	$	60,000	$	12,200	$	(47,800	)
Total		$	60,000	$	12,200	$	(47,800	)

At September 30, 2010, the Company made the determination that certain of its available-for-sale securities had experienced an impairment that was temporary. This determination was made for certain investments because the decline in value had persisted for less than twelve months and was not extensive. Key factors used in determining whether or not the impairment was other-than-temporary included the length of time and the extent to which the market value of the securities had been below their cost.

The following table presents certain details related to investments for which the Company determined the impairment was temporary:

					Market
	# of				Value		Unrecognized
Investment	Shares		Cost		at 9/30/10		Impairment
Merger Mines	729,299		103,885		36,465		(67,420	)
New Jersey Mining	142,875		34,290		32,861		(1,429	)
Vindicator Mines	88,000		17,600		10,560		(7,040	)
Total		$	155,775	$	79,886	$	(75,889	)

The following summarizes the investments at September 30, 2009:


					Market
Investment	Quantity		Cost		Value

Available for Sale Securities:
Bayswater Uranium Corporation	200,000	$	60,000	$	22,000
Chester Mining Company	2,500		1,125		1,125
Gold Crest Mines	617,600		975		9,264
Lucky Friday Extension	5,000		250		250
Merger Mines	929,299		131,885		130,102
Metropolitan Mines Limited	6,000		360		360
New Jersey Mining	142,875		34,290		35,719
Vindicator Mines	88,000		17,600		16,720
Subtotal	1,991,274		246,485		215,540

Silver Coins & Bars	3,115		31,804		51,398

Total at September 30, 2009	1,994,389	$	278,289	$	266,938

The Company had an unrealized holding gain during the fiscal year ended September 30, 2009 of $5,557. This is recorded on the statements of operations as other comprehensive income (loss) and included on the balance sheet in other accumulated comprehensive income.

The Company recognized $2,225 of net gain previously included in accumulated other comprehensive income on the sale of investments during the fiscal year ended September 30, 2009.

NOTE 10: NOTES PAYABLE

In December 2007, the Company purchased equipment for $15,377 in exchange for a note. The note has a term of 43 months, bears interest at 3.90% annually and stipulates that payments of $384 be made monthly. The lender has the right to increase the interest rate to 19.8% in the event of a violation of the terms of the loan agreement. The outstanding balance on this note payable was $3,768 at September 30, 2010 all of which is payable within twelve months. The purchased equipment which serves as collateral for this note payable had a carrying amount of $9,216 at September 30, 2010.

In August 2009, the Company purchased equipment for $9,000 by paying $2,000 in cash and signing a note for the remaining $7,000. The note has a term of fourteen months, bears interest at 4.00% annually and stipulates that payments of $513 are to be made monthly. The outstanding balance on this note payable was $511 at September 30, 2010, all of which is payable within twelve months. The purchased equipment which serves as collateral for this note payable had a carrying amount of $7,563 at September 30, 2010.

In December 2009, the Company purchased for $21,694 a one-year liability insurance policy covering its Lakeview mill (the “Policy”). The Policy was purchased with a cash payment of $5,761 with the balance of $15,933 settled with a promissory note. The Company recorded prepaid insurance of $21,694 and a related entry to record a $15,933 note payable. The note had a term of nine months, bore interest at 11.25% annually and stipulated that payments of $1,855 be made monthly. The outstanding balance on this note payable was $0 at September 30, 2010. See Note 4.

NOTE 11: COMMON STOCK

The Company is authorized to issue 200,000,000 shares of $0.10 par value common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.

Fiscal 2010 Issuances

During fiscal 2010, the Company issued 5,000 shares of common stock in exchange for services valued at $900.

During fiscal 2010, the Company issued 1,250,000 shares of common stock to four of its directors in exchange for services valued at $200,000.

During fiscal 2010, the Company issued 50,000 shares of common stock for the leasing of a mining property valued at $9,000.

During fiscal 2010, the Company issued 7,051,550 shares of common stock to eighteen investors for a total of $705,155 in cash. For every share purchased, each investor received one warrant to purchase one share of common stock. The warrants are exercisable at $0.20 per share and 3,540,000 expire on August 6, 2011, and 3,511,550 expire on March 20, 2012.

Fiscal 2009 Issuances

During fiscal 2009, the Company issued 90,000 shares of common in exchange for the services of its Board of Directors valued at $9,500.

During fiscal 2009, the Company acquired certain assets from Kimberly Gold Mines, Inc. (“Kimberly”) in a transaction where the Company issued 12,145,306 shares of common stock and other consideration in exchange for 100% of Kimberly’s common stock. This transaction was valued at $2,185,126. See Note 15.

During fiscal 2009, the Company issued 4,000 shares in exchange for consulting services valued at $400.

NOTE 12: TREASURY STOCK

The Company held 818,986 and 963,986 shares of treasury stock at September 30, 2010 and September 30, 2009, respectively.

Fiscal 2010 Activity

During fiscal 2010, the Company issued 145,000 treasury shares in exchange for consulting services valued at $26,100. The treasury shares had a cost of $0.32 per share

Fiscal 2009 Activity

During fiscal 2009, the Company acquired equipment valued at $12,500 in exchange for $5,000 in cash and 50,000 shares of treasury stock valued at $7,500, or $0.15 per share, with a cost of $5,500, or $0.11 per share. The difference between the cost and the value of the treasury shares was recorded as an increase to Additional Paid-In Capital.

During fiscal 2009, the Company repurchased for treasury 100,000 common shares at a price of $20,000, or $0.20 per share. These common shares were repurchased in connection with a settlement agreement with its former Chief Executive Officer, Conrad Houser.

During fiscal 2009, the Company issued 70,000 treasury shares in exchange for consulting services. The treasury shares were valued at $7,000, or $0.10 per share, with a cost of $7,700, or $0.11 per share. The difference between the cost and the value of the treasury shares was recorded as a reduction to Additional Paid-In Capital.

During fiscal 2009, the Company issued 200,000 treasury shares with a value of $22,000, or $0.11 per share, with a cost of $64,000, or $0.32 per share, in connection with its acquisition of 100% of Kimberly’s common stock. The difference between the cost and the value of the treasury shares was recorded as a reduction to Additional Paid-In Capital.

NOTE 13: STOCK OPTIONS AND WARRANTS

During fiscal 2007, the Company issued 725,000 non-detachable warrants to purchase an equal number of the Company’s common stock in connection with the issuance of 1,450,000 shares in private placements. The warrants are exercisable at $0.50 per share and expired on December 31, 2009.

During fiscal 2008, the Company issued 775,000 non-detachable warrants to purchase an equal number of the Company’s common stock in connection with the issuance of 1,550,000 shares in private placements. The warrants are exercisable at $0.40 per share. 525,000 of these warrants expired on January 26, 2009, and 250,000 expired on June 9, 2009.

During fiscal 2010, the Company issued 7,051,550 non-detachable warrants to purchase an equal number of the Company’s common stock in connection with the sale of 7,051,550 shares in private placements. The warrants are exercisable at $0.20 per share and 3,540,000 expire on August 6, 2011, and 3,511,550 expire on March 20, 2012.

NOTE 14: SALE OF LODE CLAIM

During fiscal 2010, the Company received $175,000 related to the sale to an unrelated party of its North Osburn claims in the Silver Valley. Since the Company had previously expensed the approximately $10,000 cost to acquire and maintain this property, the entire proceeds of $175,000 were accounted for as gain and presented under the caption “Net gain on the sale of lode claim” on the Company’s Consolidated Statements of Operations.

NOTE 15: KIMBERLY GOLD MINES, INC. AND CANCELLATION OF DEBT INCOME

On March 12, 2009, the Company acquired certain assets from Kimberly Gold Mines, Inc. (“Kimberly”) in a transaction where the Company issued 12,145,306 shares of common stock and other consideration in exchange for 100% of Kimberly’s common stock valued at $2,185,126. Included in this acquisition were 127 unpatented mining claims located primarily in Idaho and Washington as well as a mill in need of refurbishing and various pieces of equipment.

The value of $2,185,126 consisted of the Company’s common stock valued at $1,821,796, a note receivable from Kimberly valued at $222,408, Kimberly’s common stock previously held for investment by the Company valued at $38,035, certain accounts payable assumed by the Company valued at $72,887, the issuance of 200,000 shares of treasury stock valued at $22,000 and a cash payment of $8,000 made to a former vendor of Kimberly.

During fiscal 2010, the Company determined that the balance of $69,418 remaining in the accounts payable assumed by the Company with this acquisition were not going to be settled. Accordingly, the Company made an entry to remove the accounts payable and to record cancellation of debt income of $69,418.

NOTE 16: COMMITMENTS & CONTINGENCIES

Environmental Issues

The Company is engaged in mineral mining and may become subject to certain liabilities as they relate to environmental cleanup of mining sites or other environmental restoration.

Although the minerals exploration and mining industries are inherently speculative and subject to complex environmental regulations, the Company is unaware, with the exception detailed below under the caption “Civil Action Filed”, of any pending litigation or of any specific past or prospective matters which could impair the value of its mining claims.

Chester Mining Company Lease Cancellation

During 2004, the Company entered into a 25-year lease agreement for a mining property in Bonner County. Yearly lease payments on the property were 100,000 shares of common stock. On August 27, 2008, the Company amended this lease agreement (the “Amended Lease”). The Amended Lease included a provision that changed the number of shares to be payable each year to 50,000 from 100,000.

In April 2010, the Company cancelled the lease agreement and, under the terms of the agreement, paid to the lessor 50,000 shares of its common stock (valued at $9,000) and a royalty fee $259.

Bullion Group Claims Lease

On January 24, 2004, the Company leased two unpatented mining claims located in Shoshone County, Idaho, to Sterling Mining Company. The lease stipulates a four year exploration program commencing within five years of the lease date. The lease further stipulates that Shoshone would receive a production royalty equal to 10% of the net proceeds from the production of minerals from the property. This lease agreement may be found in Exhibit No. 10.4 which was filed as an exhibit to the Company’s Annual Report on Form 10-KSB filed with the Commission on December 4, 2006.

Iola Group Claims Lease

On September 22, 2008, Kimberly Gold Mines, Inc. (Kimberly), which the Company acquired on March 12, 2009, entered into a lease agreement with Iola Corporation whereby the Company leases certain mining claims known as the Iola Claim Group located in the Warren Mining District, Idaho. The lease stipulates that the Company pay annual rent of $10,000 and pay a net smelter royalty of 4%-8% depending upon the price of gold. Further, the lease grants the Company an option to purchase the claims for $750,000 at any time. This lease agreement is filed as Exhibit No. 10.8.

Silver King LTD Lease

On July 19, 2007, Kimberly Gold Mines, Inc. (Kimberly), which the Company acquired on March 12, 2009, entered into a lease agreement with Silver King LTD whereby the Company leases certain patented mining claims totaling 174 patented acres located in the Warren Mining District, Idaho. The lease stipulates that the Company pay annual rent of $10,000 for two years and pay a net smelter royalty of 5%. Further the lease grants the Company an option to purchase the 174 patented claims for $1,000,000. This lease agreement is filed as Exhibit No. 10.9.

Civil Action Filed

On November 17, 2008, the United States Environmental Protection Agency (EPA) filed a civil action against the Company in the United States District Court for the District of Idaho. The civil action seeks recovery of funds paid by the EPA in response to alleged releases of hazardous substances at the Company’s Idaho Lakeview mine and mill site in Bonner County, Idaho. The Company and the EPA have reached an agreement whereby the Company must pay $50,000 and we are prohibited from conducting activities on the minimal amount of ground that would disturb the cleanup work in place at the properties subject to the civil action. On August 4, 2010, the Company paid this liability in full.

Certain Annual Fees

The Company incurs certain annual fees, which may vary, associated with maintaining its various claims and properties as follows:

		Claim		Property		Lease
Property		Fees		Taxes		Payments

Conjecture	$	-	$	-	$	-
Idaho Lakeview, Weber, Keep Cool & Drumheller		3,360		7,790		-
Auxer		280		-		-
Talache		280		-		-
Shoshone		-		61		-
Bullion		-		100		-
North Osburn		-		-		-
Montgomery		3,500		-		-
Regal		560		-		-
Stillwater Extension Claims		1,400		-		-
Princeton Gulch Group		840		-		-
Western Gold		1,820		-		-
Gold Road		2,240		-		-
Cerro Colorado		420		-		-
California Creek Uranium		-		-		-
Iola Group Claims		-		-		10,000
Silver King LTD Claims		-		-		10,000
Rescue Gold Mine Claims		11,760		-		-
Kimberly Gold Mine Claims		3,360		-		-
Shaft Claims		2,660		-		-
	$	32,480	$	7,951	$	20,000

NOTE 17: SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date that the consolidated financial statements were available to be issued and management has determined that there have not been any events that have occurred that would require adjustments to the unaudited financial statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANICAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this annual report on Form 10-K, an evaluation was performed under the supervision and with the participation of Shoshone Silver Mining Company’s management including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operating of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of September 30, 2010. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Management of Shoshone Silver Mining Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the Chief Executive Officer and the Chief Financial Officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Based on this assessment, the Company’s management has concluded that, as of September 30, 2010, the Company’s internal control over financial reporting was effective based on the criteria in Internal Control – Integrated Framework issued by the COSO.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended September 30, 2010, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

For information with respect to the executive officers and directors of the Registrant, See Item 4—“Directors and Executive Officers” at the end of Part I of this report.

ITEM 11. EXECUTIVE COMPENSATION

During fiscal, we paid our principal executive officer $40,267. No executive officers were paid in excess of $100,000.

During fiscal 2010, we issued 1,250,000 shares of common stock to four of our directors in exchange for services valued at $200,000.

The Company has no stock option plans and has not issued any options or warrants to any of its employees or directors. The Company has no employment agreements with any of its officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth as of September 30, 2010, the common stock ownership of the directors, executive officers and each person known by us to be the beneficial owner of five percent or more of our common stock. The percentage of ownership is based on 42,659,037 shares of our common stock outstanding as of September 30, 2010.

	Number of
	Shares of
Name and	Common
Address	Stock
of Beneficial	Beneficially	Percentage
Owner	Owned	of Shares
Lex Smith	435,000	1.02%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Carol Stephan	1,168,856	2.74%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Melanie Farrand	364,000	0.85%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Don Rolfe	116,948	0.27%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Ed Lehman	10,000	0.02%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

All officers and directors as a group (5 persons)	2,094,804	4.91%

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

During the previous two fiscal years there have been no transactions between us, or the Company’s subsidiary on the one hand, and any officer, director or principal shareholder on the other.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The Company paid audit and review fees to BehlerMick PS of $48,828 during fiscal 2010 and $54,298 during fiscal 2009.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(A) Documents filed as part of this report are as follows:

	1.	Financial Statements.

			See listing of financial statements included as part of this Form 10-K in Item 8 of Part II.

	2.	Financial Statement Schedules:

			Financial statement schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

	3.	Exhibits:

			The following list of exhibits includes exhibits submitted with this Form 10-K as filed with the SEC and those incorporated by reference to other filings.

2.1.1	Articles of Incorporation. (*)
2.1.2	Certificate of Amendment of Articles of Incorporation dated January 21, 1970 (*)
2.1.3	Certificate of Amendment of Articles of Incorporation dated November 17, 1969 (*)
2.1.4	Articles of Amendment to the Articles of Incorporation dated August 28, 1983 (*)
2.1.5	Articles of Amendment to the Articles of Incorporation dated May 15, 1998 (*)
2.2	Bylaws. (*)
10.1	Office Lease between the Company and Shoshone Business Center, Inc. dated November 1, 2004. ($)
10.2	Mining Lease and Agreement between the Company and Chester Mining Company, Inc. dated March 25, 2004. ($)
10.3	Martin Sutti declaration of conditional transfer of certain mining concessions dated May 12, 2004. ($)
10.4	Mining Lease and Agreement between the Company and Sterling Mining Company dated January 19, 2004 #
10.5	Bilbao Indemnity and Guarantee Agreement (&)
10.6	Bilbao Stock Purchase Agreement (&)
10.7	The Amending Agreement to the Stock Purchase Agreement and Indemnity and Guarantee Agreement (%)
10.8	Iola Corporation Lease and Option Agreement (%)
10.9	Silver King LTD Lease and Option Agreement (%)
10.10	Camp Project Lease (+)
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended. (+)
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended. (+)
32.1	Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350. (+)
32.2	Certification of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350. (+)
99.1	Map of Lakeview Group (^)
99.2	Map of Shoshone Group and Bullion Group (^)
99.3	Map of Auxer Property (^)
99.4	Map of Lucky Joe Property (^)
99.5	Map of Regal Mine (^)
99.6	Map of Stillwater Extension Claims (^)
99.7	Map of Montgomery Mine (^)
99.8	Map of Arizona Gold Fields Claims (^)
99.9	Map of California Creek Property (^)
99.10	Map of Princeton Gulch Group (^)
99.11	Map of Cerro Colorado Group (^)
99.12	Map of Bilbao-Mexico Property (^)
99.13	Map of North Osburn Property (>)
99.14	Maps of Iola Group Claims Lease, Silver King LTD Lease, Rescue Gold Mine and Kimberly Gold Mine (%)
99.15	Map of Shaft Claims (%)
99.16	Map of Camp Project Claims (+)

*	Incorporated by reference to the Company’s Registration Statement on Form 10-SB, filed with the Commission on February 15, 2001, File No. 000-31965.
$	Incorporated by reference to the Company’s Annual Report on Form 10-KSB, filed with the Commission on August 3, 2006, File No. 000-31184.
+	Filed herewith.
#	Incorporated by reference to the Company’s Annual Report on Form 10-KSB, filed with the Commission on December 4, 2006, File No.000-31184.
^	Incorporated by reference to the Company’s Annual Report on Form 10-KSB/A Amendment 1,filed with the Commission on December 3, 2007, File No. 000-31184
>	Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the Commission on April 14, 2008, File No.000-31184.
&	Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the Commission on January 13, 2009, File No.000-31184.
%	Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the Commission on January 10, 2010, File No.000-31184.

SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SHOSHONE SILVER MINING COMPANY

Dated: December 24, 2010

By:

/s/ Lex Smith
Lex Smith
President and Principal Executive Officer

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/ Lex Smith
Lex Smith
President and Principal Executive Officer

By:

/s/ Melanie Farrand
Melanie Farrand
Treasurer and Principal Financial Officer

Attached files

Shoshone Silver/Gold Mining Co Reports

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