Shoshone Silver/Gold Mining Co - FORM 10-K

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - Shoshone Silver/Gold Mining Co	Financial_Report.xls
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-31.1 - CERTIFICATION - Shoshone Silver/Gold Mining Co	exhibit31-1.htm
EX-32.1 - CERTIFICATION - Shoshone Silver/Gold Mining Co	exhibit32-1.htm
EX-10.11 - IOLA CORPORATION LEASE AND OPTION AGREEMENT DATED JUNE 2011 - Shoshone Silver/Gold Mining Co	exhibit10-11.htm
EX-10.12 - SILVER KING LTD LEASE AND OPTION AGREEMENT DATED JUNE 2010 - Shoshone Silver/Gold Mining Co	exhibit10-12.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, 2011

[ ] 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
(Exact name of registrant as specified 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, 2011, 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 $5,762,433.

There were 52,926,704 shares of the registrant’s $0.10 par value common stock outstanding on December 13, 2011.

FORM 10-K
For the Fiscal Year Ended September 30, 2011

TABLE OF CONTENTS

Page #

PART I		4
Item 1.	Business	4
Item 1A.	Risk Factors	25
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	25
Item 3.	Legal Proceedings	26
PART II		27
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	Selected Financial Data	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 8.	Consolidated Financial Statements and Supplementary Data	34
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	55
Item 9A(T).	Controls and Procedures	55
Item 9B.	Other Information	56
PART III		57
Item 10.	Directors and Executive Officers of the Registrant	57
Item 11.	Executive Compensation	57
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13.	Certain Relationships and Related Transactions and Director Independence	58
Item 14.	Principal Accounting Fees and Services	58
PART IV		59
Part 15.	Exhibits, Financial Statement Schedules	59

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		783	15	24
Millsite		13	1
Drumheller		111	6
Auxer		40	-	2
Talache		40	-	2
Subtotal		987	22	28

Silver Valley	Shoshone County, Idaho
Shoshone		96	5	-
Bullion		138	7	-
Subtotal		234	12	-

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
Regal		80	-	4
		80	-	4

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.

Idaho Lakeview, Keep Cool, Weber and Drumheller

The Idaho Lakeview, Weber, Keep Cool and Durmheller 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)

During fiscal 2011, we issued 100,000 shares of our common stock valued at $10,000 in exchange for three acres contiguous with our Lakeview mining properties.

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 and 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. Through fiscal 2011 we have generated revenues of $67,996 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 2012 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 $344,690 have not suffered impairment. Accordingly, at September 30, 2011, 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 an extension of the Hewer vein. We issued 109,141 shares of our common stock to acquire these claims in February 1984.

During 2006, we sold the Drumheller Group of claims to an unrelated party in exchange for cash of $30,000 and a promissory note for $120,000. During 2009, due to non-payment of the note receivable, we received a Quitclaim Deed releasing the property that was the collateral of the note receivable. We determined the fair value of the reclaimed property to be $131,553 which is included in our financial statements under mining properties.

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:

We 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, 2011, 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, 2011, we did not consider a write-down to the carrying cost necessary.

Silver Valley Holdings

Shoshone has two holdings in Idaho’s Silver Valley: the Shoshone and Bullion 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 2011, 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 2011, 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 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.

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.

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. Title to the property is maintained by annual payment of BLM Maintenance Fees of $11,760. 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 required 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 was accomplished. 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 drift for the mine ventilation system.

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 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 mine as part of Shoshone’s ongoing preparations to bring the Rescue Mine and mill back into full operation.

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, 2011, 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. Title to the property is maintained by annual payment of BLM Maintenance Fees of $3,360. 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, 2011, 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, 2011, we did not consider a write-down to the carrying cost necessary.

Montgomery Mine Group

During fiscal 2011, we received $50,000 related to the sale to an unrelated party of our Montgomery claims. The entire proceeds of $50,000 were accounted for as gain and presented under the caption “Net gain on the sales of lode claims” on our Consolidated Statements of Operations.

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 2012.

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. Title to the property is maintained by annual payment of BLM Maintenance Fees of $2,660. 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, 2011, we had 9 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 exploration properties are described in Item 1.

We owned a 50% unencumbered interest in a commercial office building in Coeur d’Alene, Idaho. During the second quarter of fiscal 2011, we exchanged this 50% interest for certain patented lode mining claims located in the Silver Valley, Idaho commonly known as the Leadville claims. Subsequently, in the fourth quarter of fiscal 2011, we sold these patented load claims for $225,000 and recorded a $50,000 gain.

Our executive offices are located at 3714 W Industrial Loop, Coeur d’Alene, ID, 83815 and our telephone number is (208) 664-0620. We lease our office space under a year-to-year lease for monthly rent payments of $1,200.

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. 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 would not materially affect our consolidated financial position, results of operations or cash flows.

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	59	President and Director
Carol Stephan	70	Secretary and Chairman of the Board
Melanie Farrand	56	Treasurer and Director
Don Rolfe	74	Vice President and Director
Edward Lehman	54	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 to the Company. 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 OTCQB under the trading symbol SHSH.OB. Summary trading by quarter for fiscal 2011 and 2010 are as follows:

Fiscal Quarter	High (a)	Low (a)

2011
Fourth Quarter	$ 0.20	$ 0.11
Third Quarter	$ 0.16	$ 0.10
Second Quarter	$ 0.20	$ 0.13
First Quarter	$ 0.32	$ 0.13

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

(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, 2011, we had approximately 1,635 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

During the three-month period ended September 30, 2011, we sold 7,556,667 shares of common stock at a price per share of $0.15 to 12 accredited investors for gross proceeds of $1,133,500. For every share purchased, each investor received one warrant to purchase one share of common stock. The warrants are exercisable at $0.25 per share and expire on August 1, 2013. This sale was made under the exemption from registration provided by Regulation D, Rule 506.

Purchases of Equity Securities by the Issuer

On July 7, 2011, we repurchased 70,000 shares of our common stock for $9,396, or an average price of $0.13 per share. This repurchase was not part of a publicly announced plan or program and the shares were repurchased on the open market. We currently do not have any plans to repurchase additional shares of our common stock.

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. During the prior fiscal year, our test runs generated revenues of $20,111 from the sale of concentrate to the smelter and generated $47,885 during fiscal 2011. Our long-term goal is to mine and mill silver at our Lakeview property.

Rescue Mine Property

Our first priority has been the upgrading and renovating the mill at the Rescue Mine Property. Once this work is completed, test runs on stockpiled ore will be conducted.

2011 Work Season - Mine development required 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 was accomplished. 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.

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 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 mine as part of our ongoing preparations to bring the Rescue Mine and mill back into full operation.

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 typically have limited cash and limited revenues and have incurred an accumulated deficit of $3,105,117 from inception through September 30, 2011. These factors raise substantial doubt about our 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 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 $2,000,000 is believed necessary to continue operations and increase development through the next twelve months. Towards this end, during fiscal 2011, we raised $1,159,500 from the issuance of 7,816,667 shares of our common stock.

Currently, we anticipate raising the majority of the remaining $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 2011to fiscal 2010:

Results of Operations

The following table sets forth certain information regarding the components of our Consolidated Statements of Operations for fiscal 2011 as compared to fiscal 2010. This table is provided to assist in assessing differences in our overall performance:

		Fiscal Year Ended
		2011		2010		$Change	% Change

Revenues	$	47,885	$	20,111	$	27,774	138.1%
Cost of Revenues		-		-		-	0.0%
Gross Profit		47,885		20,111		27,774	138.1%
General and administrative		241,965		536,656		(294,691)	-54.9%
Professional fees		93,523		123,445		(29,922)	-24.2%
Depreciation		177,100		178,804		(1,704)	-1.0%
Mining and exploration expenses		324,802		542,724		(217,922)	-40.2%
Net gain on sales of load claims		(100,000)		(175,000)		75,000	-42.9%
Total Operating Expenses		737,390		1,206,629		(469,239)	-38.9%
Loss from Operations		(689,505)		(1,186,518)		497,013	-41.9%
Other Income (Expense)
Dividend and interest income		76,965		73,467		3,498	4.8%
Gain on sales of fixed assets		10,915		5,000		5,915	118.3%
Interest expense		(503)		(4,242)		3,739	-88.1%
Net (loss) gain on sale of securities		(4,551)		1,036		(5,587)	-539.3%
Net gain on settlement of lease dispute		85,000		-		85,000	100.0%
Other income (expense)		86		142		(56)	-39.4%
Other-than-temporary impairment of investments		-		(47,800)		47,800	-100.0%
Bad debt recovery		-		47,008		(47,008)	-100.0%
Cancellation of debt income		-		69,418		(69,418)	-100.0%
Total Other Income (Expense)		167,912		144,029		23,883	16.6%
Net (Loss) Income		$(521,593)		$(1,042,489)		$520,896	-50.0%

Overview of Operating Results

The decrease in net loss in fiscal 2011 from fiscal 2010 was primarily due to decreases in virtually all administrative expenses, but primarily payroll expenses and director fees. Also contributing to the decrease in net loss in fiscal 2011 was a significant reduction in mining and exploration expenses as well as the receipt of $85,000 in net proceeds from the settlement of a lease dispute.

Partially offsetting these positive impacts was the recognition in fiscal 2010 of $69,418 in cancellation of debt income versus none in fiscal 2011 as well as the fiscal 2010 receipt of a previously written off receivable totaling $47,008. Additionally, we realized $175,000 from the sale of one lode claim in fiscal 2010 compared with $100,000 from the sale of two lode claims in fiscal 2011.

Operating Expenses

In general, our operating expenses continued to decrease in fiscal 2011 as we reduced expenditures to align our operations with our sources of capital. This action was similar to that which we undertook in fiscal 2010. In fiscal 2011 we temporarily ceased operations at our Lakeview property, just as we did in fiscal 2010, and we temporarily furloughed all employees from February 2011 through June 2011 which was several months longer than in 2010. In June 2011, we resumed limited operations at our Lakeview property and re-hired two individuals. Going forward we expect our administrative expenses to remain near fiscal 2011 levels.

Our general and administrative expenses decreased by $294,691 in fiscal 2011 from last year. This decrease was primarily the result of the fiscal 2010 issuance of 1,250,000 shares of common stock to four directors in exchange for services valued at $200,000. In fiscal 2011, we issued 176,000 share of common stock to five directors in exchange for services valued at $35,200. Our exploration expenses decreased by $217,922 in fiscal 2011 from last year which was primarily due to drilling expenses at our Lakeview property totaling $234,014 in fiscal 2010 compared with $65,000 in fiscal 2011.

Partially offsetting these positive impacts was a decrease of $75,000 in net gain from the sales of lode claims. In fiscal 2010, we recorded a gain of $175,000 from the sale of our North Osburn claims located in the Silver Valley. In fiscal 2011, we recorded a gain of $100,000 from the sale of our Leadville and Montgomery claims located in the Silver Valley and in Boundary County, respectively. See “Note 13. Sales of Lode Claims” to our consolidated financial statements for further details.

Other Income (Expenses)

Total other income (expenses) improved from a net income of $144,029 in fiscal 2010 to a net income of $167,912 in fiscal 2011. This improvement was primarily due to the fiscal 2011 receipt of $85,000 in net proceeds from the settlement of a lease dispute and, to a lesser extent, an impairment charge of $47,008 recorded in fiscal 2010 compared with none in fiscal 2011. Partially offsetting these positive impacts was the recognition in fiscal 2010 of $69,418 in cancellation of debt income versus none in fiscal 2011 as well as the fiscal 2010 receipt of a previously written off receivable totaling $47,008.

During fiscal 2011, we received $85,000 in connection with the settlement of a lease. During the first quarter of fiscal 2011, we were awarded a total of $100,000 as settlement of a claim we had filed in the Chapter 11 bankruptcy proceeds of an unrelated company. We subsequently assigned the rights to this settlement to an investment firm for net proceeds of $85,000.

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. During fiscal 2011, we determined that our investments had not suffered further impairment.

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. Additionally, during fiscal 2010, we received a payment of $47,008 on a receivable we had previously written off. This payment was presented as a component of our fiscal 2010 other income (expense).

Overview of Financial Position

At September 30, 2011, we had cash of $942,428, total liabilities of $53,155 and working capital of $934,410. During fiscal 2011, we raised $1,159,500 in net proceeds from the issuance of 7,816,667 shares of our common stock. Also, during fiscal 2011, we received $275,000 from the sale of two lode claims and we received $85,000 in lease income as a settlement from a mining company that had filed for relief under Chapter 11 of the United States Bankruptcy Code. These proceeds were used primarily to continue limited 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, 2011, property, plant and equipment before accumulated depreciation totaled $3,255,558, a decrease of $203,885, from $3,459,443 at September 30, 2010. This decrease was primarily related to the exchange of our 50% unencumbered interest in a commercial building in Coeur d’Alene, Idaho for certain patented lode mining claims. This non-monetary exchange was valued at $175,000. Also contributing to this decrease, although to a lesser extent, was our disposal of certain obsolete assets with a historical cost of $40,693 and accumulated depreciation of $37,855.

See “Note 5. Property, Plant and Equipment” to our consolidated financial statements for further details.

Notes Receivable

On September 30, 2011, we had a long-term note receivable, net of discount, of $1,614,841 compared with $1,537,944 at September 30, 2010. The increase related entirely to the amortization of the discount into interest income.

See “Note 7. Notes Receivable” to our consolidated financial statements for further details.

Investments

Our investment portfolio at September 30, 2011, was $18,669, a decrease of $113,761 from the September 30, 2010, balance of $132,430. This decrease was primarily due to the sale of 943,299 shares of common stock and 1,195 ounces of silver during fiscal 2011.

See “Note 8: Investments” to our consolidated financial statements for further details.

Accounts Payable

Our accounts payable were $53,155 at September 30, 2011, a decrease of $189,760 from the September 30, 2010, balance of $242,915. The balance at the end of fiscal 2010 was comprised almost entirely of a payable related to exploratory work being conducted at our Rescue Mine which was paid during fiscal 2011.

Stockholders’ Equity

Our total stockholders’ equity was $6,354,741 at September 30, 2011, an increase of $781,117 from $5,573,624 at September 30, 2010. This increase was primarily due to the issuance of 7,816,667 shares of our common stock for net proceeds of $1,159,500. Partially offsetting this negative impact was a net loss of $522,993 incurred during fiscal 2011.

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

Liquidity and Capital Resources

Operating Activities

During fiscal 2011, our operating activities used $687,259 and used $796,743 during fiscal 2010. This improvement was primarily the result of the realization of a net loss of $521,593 during fiscal 2011 period compared to a net loss of $1,042,489 realized during fiscal 2010. Partially offsetting this positive impact was a decrease in accounts payable during fiscal 2011 of $199,760 compared with an increase of $152,710 in fiscal 2010.

Investing Activities

During fiscal 2011, our investing activities provided $422,315 and provided $151,412 during fiscal 2010. This improvement was primarily due to the year-over-year increase in the proceeds from sale of investment of $118,697. In fiscal 2011 we sold 943,299 shares of common stock and 1,195 ounces of silver compared with 250,000 shares of common stock and 1,676 ounces of silver last year. Also contributing to the increase were net proceeds from the sales of lode claims of $275,000 in fiscal 2011 compared with $175,000 a year ago.

See “Note 8: Investments” and “Note 13: Sales of Lode Claims” to our consolidated financial statements for further details.

Financing Activities

During fiscal 2011, our financing activities provided $1,151,519 and provided $677,618 during fiscal 2010. This increase was primarily due to net proceeds of $1,159,500 received from the issuance of common stock during fiscal 2011, compared with $705,155 during fiscal 2010.

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Shoshone Silver Mining Company

We have audited the accompanying consolidated balance sheet of Shoshone Silver Mining Company and subsidiaries as of September 30, 2011, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for the year ended September 30, 2011 and for the period from January 1, 2000 (inception of exploration stage) to September 30, 2011. 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 audit. The financial statements the period from January 1, 2000 (inception of exploration stage) to September 30, 2010 were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their report dated December 23, 2010.

We conducted our audit 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 audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated 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, 2011, and the results of its operations and its cash flows for the year ended September 30, 2011 and for the period from January 1, 2000 (inception of exploration stage) to September 30, 2011 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/MartinelliMick PLLC

MartinelliMick PLLC

Spokane, Washington

December 15, 2011

This is the report of BehlerMick PS from the prior year and this report has not been reissued.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Shoshone Silver Mining Company

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.

/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,
		2011			2010
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	942,428		$	55,853
Deposits and prepaids		48,780			3,616
Supplies inventory		1,777			1,957
Total Current Assets		992,985			61,426

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment		3,255,558			3,459,443
Accumulated depreciation		(1,675,106	)		(1,553,772	)
Total Property Plant and Equipment		1,580,452			1,905,671

MINERAL AND MINING PROPERTIES		2,206,369			2,196,369

OTHER ASSETS
Notes receivable (net of discount)		1,614,841			1,537,944
Investments		18,669			132,430
Total Other Assets		1,633,510			1,670,374

TOTAL ASSETS	$	6,413,316		$	5,833,840

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	53,155		$	242,915
Accrued expenses		5,420			13,022
Notes payable		-			4,279
Total Current Liabilities		58,575			260,216

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' EQUITY
Common stock, 200,000,000 shares authorized, $0.10 par value;
51,087,704 and 42,659,037 shares issued and outstanding		5,108,770			4,265,904
Additional paid-in capital		4,554,963			4,148,550
Treasury stock		(206,894	)		(206,253	)
Accumulated deficit in exploration stage		(1,437,635	)		(916,042	)
Accumulated deficit prior to exploration stage		(1,667,482	)		(1,667,482	)
Accumulated other comprehensive income (loss)		3,019			(51,053	)
Total Stockholders' Equity		6,354,741			5,573,624

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY	$	6,413,316		$	5,833,840

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)
		2011			2010			to September 30, 2011

REVENUES	$	47,885		$	20,111		$	209,585

COST OF REVENUES		-			-			228,828

GROSS PROFIT (DEFICIT)		47,885			20,111			(19,243	)

OPERATING EXPENSES
General and administrative		241,965			536,656			1,453,083
Professional fees		93,523			123,445			1,275,833
Depreciation		177,100			178,804			819,943
Mining and exploration expenses		324,802			542,724			4,560,534
Net gain on sales of load claims		(100,000	)		(175,000	)		(468,907	)
Total Operating Expenses		737,390			1,206,629			7,640,486

LOSS FROM OPERATIONS		(689,505	)		(1,186,518	)		(7,659,729	)

OTHER INCOME (EXPENSES)
Bad debt recovery		-			47,008			47,008
Cancellation of debt income		-			69,418			69,418
Dividend and interest income		76,965			73,467			356,754
Gain on sales of fixed assets		10,915			5,000			28,115
Gain on sale of Mexican mining concession		-			-			4,363,353
Gain on settlement of note receivable		-			-			64,206
Interest expense		(503	)		(4,242	)		(12,051	)
Lease income		-			-			444,044
Loss on abandonment of asset		-			-			(20,000	)
Net (loss) gain on sale of investments		(4,551	)		1,036			1,128,918
Net gain on settlement of lease dispute		85,000			-			85,000
Other income (expense)		86			142			197,435
Other-than-temporary impairment of investments		-			(47,800	)		(149,279	)
Unrealized holding loss on marketable securities		-			-			(380,827	)
Total Other Income (Expenses)		167,912			144,029			6,222,094

LOSS BEFORE INCOME TAXES		(521,593	)		(1,042,489	)		(1,437,635	)

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

NET LOSS		(521,593	)		(1,042,489	)		(1,437,635	)

OTHER COMPREHENSIVE LOSS
Net annual changes in accummulated other comprehensive income (loss)		54,072			(39,839	)		3,019

NET COMPREHENSIVE LOSS	$	(467,521	)	$	(1,082,328	)	$	(1,434,616	)

NET LOSS PER COMMON SHARE, BASIC	$	(0.01	)	$	(0.03	)

NET LOSS PER COMMON SHARE, DILUTED	$	(0.01	)	$	(0.03	)

WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING, BASIC		43,392,440			38,982,098

WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING, DILUTED		43,392,440			38,982,098

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, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(521,593	)	$	(1,042,489	)	$	(1,437,635	)
Adjustments to reconcile net income (loss) to net cash used by operations:
Adjustment to balance of note receivable		-			-			(766	)
Amortization of note receivable discount		(76,897	)		(73,235	)		(249,478	)
Available-for-sale securities issued in exchange for services		-			-			135,140
Available-for-sale silver investment issued in exchange for services		-			3,320			3,560
Bad debt expense		-			-			9,624
Cancellation of debt income		-			(69,418	)		(69,418	)
Common stock issued for mining and exploration expenses		13,600			9,000			308,100
Common stock issued for services		54,200			200,900			458,686
Common stock issued in settlement of agreement with former CEO		-			-			20,000
Depreciation and amortization expense		193,216			201,257			858,512
Discount given on early payment on note receivable		-			-			50,000
Gain on sale of fixed asset		(10,914	)		(5,000	)		(28,114	)
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			149,279
Net gain on sale of lode claim		(100,000	)		(175,000	)		(468,907	)
Net gain on sale of Mexican mining concession		-			-			(4,363,353	)
Net loss (gain) on sale of investments		4,551			(1,036	)		(1,128,918	)
Treasury stock issued for services		5,040			26,100			58,460
Unrealized holding loss on marketable securities		-			-			380,827
Changes in assets and liabilities
Change in accounts payable		(199,760	)		152,710			(38,091	)
Change in accrued interest receivable		-			-			(20,255	)
Change in accrued liabilities		(7,602	)		(66,129	)		1,436
Change in deposits and prepaids		(41,280	)		(5,761	)		(20,032	)
Change in other current assets		-			-			(14,443	)
Change in stock to issue		-			-			230,680
Change in supplies inventory		180			238			10,955
Net cash used in operating activities		(687,259	)		(796,743	)		(4,795,357	)

CASH FLOWS FROM INVESTING ACTIVITIES
Advances on notes receivable		-			-			(111,022	)
Advances to related party		-			-			(395,000	)
Issuance of note receviable from related party		-			-			(243,000	)
Payments received on notes receivable		-			-			582,846
Payments received on notes receivable from related party		-			-			332,498
Proceeds from sale of fixed assets		800			5,000			18,000
Proceeds from sale of investments		163,282			44,585			4,790,767
Proceeds from sale of lode claim		275,000			175,000			463,907
Proceeds from sale of Mexican mining concession		-			-			2,497,990
Proceeds from short-term loans		-			-			160,760
Purchase of fixed assets		(16,767	)		(73,173	)		(1,097,249	)
Purchase of mineral and mining properties		-			-			(76,472	)
Purchases of investments		-			-			(4,059,939	)
Net cash provided by investing activities		422,315			151,412			2,864,086

CASH FLOWS FROM FINANCING ACTIVITIES
Common shares repurchased for treasury		(9,396	)		-			(50,616	)
Net proceeds from sale of common stock		1,159,500			705,155			3,107,225
Net proceeds from sale of treasury stock		5,694			-			5,694
Payment made on long-term note payable		(4,279	)		(27,537	)		(268,818	)
Payment of common stock subscriptions		-			-			20,225
Net cash (used in) provided by financing activities		1,151,519			677,618			2,813,710

Net increase in cash		886,575			32,287			882,439

Cash, beginning of period		55,853			23,566			59,989

Cash, end of period	$	942,428		$	55,853		$	942,428

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest expense paid	$	503		$	2,698		$	10,507
Income taxes paid	$	-		$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accounts payable issued in exchange for partial payment on office building and prepaid expense	$	10,000		$	-		$	60,000
Common stock issued for purchase of equipment, mining properties and prepaid expense	$	20,000		$	-		$	160,340
Common stock issued for services, accounts payable, finder's fee and mining & exploration expenses	$	-		$	-		$	539,333
Deposit utilized to purchase fixed asset	$	-		$	-		$	5,000
Equipment received in exchange for settlement of note recievable	$	-		$	-		$	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
Mineral properties acquired in exchange for common stock, office building and other consideration	$	175,000		$	-		$	1,852,126
Mineral property reacquired upon default	$	-		$	-		$	131,553
Mining equipment acquired in exchange for common stock and other consideration	$	-		$	-		$	260,000
Note issued in exchanged for vehicle, equipment and prepaid asset	$	-		$	15,933		$	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
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

SHOSHONE SILVER MINING COMPANY

(an Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

																				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

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
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
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
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 loss 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
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
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 loss on investments	-		-		-			-			-			-			-			(200,114	)		(200,114	)
Net income for nine-month period ended September 30, 2008	-		-		-			-			-			-			3,645,358			-			3,645,358
Balance at September 30, 2008	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 loss for twelve-month period ended September 30, 2009	-		-		-			-			-			-			(1,779,976	)		-			(1,779,976	)
Balance at September 30, 2009	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 loss on investments	-		-		-			-			-			-			-			(39,839)			(39,839	)
Net loss for twelve-month period ended September 30, 2010	-		-		-			-			-			-			(1,042,489	)		-			(1,042,489	)
Balance at September 30, 2010	42,659,037	$	4,265,904	$	4,148,550		$	(206,253	)	$	-		$	-		$	(2,583,524	)	$	(51,053	)	$	5,573,624
Common stock issued for cash at $0.10 per share	260,000		26,000		-			-			-			-			-			-			26,000
Common stock issued for cash at $0.15 per share	7,556,667		755,666		377,834			-			-			-			-			-			1,133,500
Common stock issued at $0.10 per share in exchange for exploration services	136,000		13,600		-			-			-			-			-			-			13,600
Common stock issued at $0.10 per share in exchange for mineral property	100,000		10,000		-			-			-			-			-			-			10,000
Common stock issued at $0.10 per share in exchange for prepaid expenses	100,000		10,000		-			-			-			-			-			-			10,000
Common stock issued at $0.20 per share in exchange for services	266,000		26,600		26,600			-			-			-			-			-			53,200
Common stock issued at $0.10 per share in exchange for services	10,000		1,000		-			-			-			-			-			-			1,000
70,000 shares of treasury stock acquired at an average cost of $0.13 per share	-		-		-			(9,396	)		-			-			-			-			(9,396	)
40,000 shares of treasury stock sold for $5,694 with a cost basis of $0.11 per share	-		-		1,294			4,400			-			-			-			-			5,694
36,000 shares of treasury stock issued in exchange for services at $0.12 per share	-		-		685			4,355			-			-			-			-			5,040
Net annual changes in accummulated other comprehensive income (loss)	-		-		-			-			-			-			-			54,072			54,072
Net loss for twelve-month period ended September 30, 2011	-		-		-			-			-			-			(521,593	)		-			(521,593	)
Balance at September 30, 2011	51,087,704	$	5,108,770	$	4,554,963		$	(206,894	)		-			-		$	(3,105,117	)	$	3,019		$	6,354,741

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 $250,000 per bank, per account holder by the Federal Deposit Insurance Corporation (FDIC). 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, 2011, the Company’s cash balances exceeded the FDIC limits by $555,022 but did not exceed the SPIC limits. At September 30, 2010, the Company’s cash balances did not exceed 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, 2011, there were 11,328,217 common stock warrants outstanding which were not included in the calculation of earnings (loss) per share at September 30, 2011, because they would have been anti-dilutive.

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.

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.

The following table presents information about the Company’s assets measured at fair value on a recurring basis as of September 30, 2011, 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, 2011, Using
				Quoted Prices
				In Active		Other		Significant
				Markets for		Observable		Unobservable
		Fair Value		Identical Assets		Inputs		Inputs
Description		September 30, 2011		(Level 1)		(Level 2)		(Level 3)
Investments	$	18,669	$	18,669	$	-	$	-
Note Receivable (net of discount)		1,614,841		-		1,614,841		-
Total Assets Measured at Fair Value	$	1,633,510	$	18,669		$1,614,841	$	-

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 typically has limited cash and limited revenues and has incurred an accumulated deficit of $3,105,117 from inception through September 30, 2011. 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 $2,000,000 is believed necessary to continue operations and increase development through the next twelve months. Towards this end, during fiscal 2011, the Company raised $1,159,500 from the issuance of 7,816,667 shares of its common stock.

Currently, the Company anticipates raising the majority of the remaining $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 8.

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 6.

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 5.

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, 2011, 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 (estimated at a 34% federal income tax rate) at September 30, 2011 and September 30, 2010 were as follows:

		September 30,			September 30,
		2011			2010
Deferred Tax Assets

Net operating loss carry-forward	$	1,040,000		$	858,000
Recognized impairment of investments		-			16,000
Net deferred tax assets		1,040,000			874,000

Deferred Tax Liabilities
Installment income		(605,000	)		(605,000	)
Depreciation		(4,900	)		(19,900	)
Deferred tax liabilities		(609,900	)		(624,900	)

Net deferred tax assets	$	430,100		$	249,100

Valuation allowance		(430,100	)		(249,100	)
Net deferred tax 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, 2011. At September 30, 2011 and September 30, 2010, the Company had net operating loss carry-forwards of approximately $3,060,000 and $2,525,000, respectively, which expire in the years 2025 through 2031.

At September 30, 2011, the Company had a total deferred tax liability of $609,900. Of this amount $605,000 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 7.

At September 30, 2011, the Company has a total deferred tax asset of $1,040,000 which relates to the Company’s net operating loss carry-forward of $3,060,000. The change in the valuation allowance from fiscal 2010 to fiscal 2011 was $181,000.

Recently Adopted Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-04, Fair Value Measurement (“ASU 2011-04). ASU 2011-04 amends the requirements related to fair value measurement by changing the wording used to describe many requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurement requirements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, and is applied prospectively. The Company will adopt ASU 2011-04 at the beginning of its first quarter of fiscal year 2012. Adoption of ASU 2011-04 is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income (“ASU 2011-05”). To increase the prominence of items reported in other comprehensive income, the FASB eliminated the option of presenting components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of the presentation of the components of other comprehensive income, ASU 2011-05 requires that the Company present on the face of the financial statements the reclassification adjustments for items that are reclassified from other comprehensive income to net income. The requirements of ASU 2011-05 will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The implementation of ASU 2011-05 is not expected to have a material impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued Accounting Standards Update No. 2011-08, Testing Goodwill for Impairment (“ASU 2011-08”). ASU 2011-08 amends the guidance regarding assessing whether it is necessary to perform goodwill impairment tests on a recurring basis. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair market value of a reporting unit is less than its carrying amounts as a basis for determining whether it is necessary to perform the goodwill impairment test. ASU 2011-08 is effective for annual and interim periods beginning after December 15, 2011, with early adoption permitted, including annual and interim goodwill impairment tests performed as of dates before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company will adopt ASU 2011-08 at the beginning of its first quarter of fiscal year 2012. Adoption of ASU 2011-08 is not expected to have a material impact on the Company’s consolidated financial statements.

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. At September 30, 2011, the Company had accrued no liability related to reclamation and remediation expenses. The Company has conducted only exploratory activities and thus lacks sufficient data for estimation of reclamation and remediation expenses.

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.

Revenue Recognition

The Company generates limited income from the sale of silver concentrate produced at its Lakeview mill facility from previously stockpiled ore. During fiscal 2011 and 2010, the Company generated $47,885 and $20,111, respectively, 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 10.

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:

DEPOSITS AND PREPAID EXPENSES

During the fiscal 2011 third quarter, the Company prepaid $30,000 of mining claims lease expense with a cash payment of $10,000, the issuance of 100,000 shares of common stock and a $10,000 accrual. The Company is amortizing this prepaid expense ratably over twelve months ($2,500 per month). During fiscal 2011, $12,500 of this expense was amortized into exploration expenses. The balance on this prepaid at September 30, 2011 was $17,500.

During the fiscal 2011 fourth quarter, the Company prepaid $31,280 of drilling expenses. This prepaid amount was relieved in the fiscal 2012 first quarter upon completion of the drilling work.

NOTE 4:

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, 2011, the Company had 168 coins remaining in inventory with an historical cost basis of $1,777.

NOTE 5:

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, 2011 and September 30, 2010:

		September 30,			September 30,
		2011			2010
Administrative:
Building	$	-		$	167,129
Equipment		623,312			652,156
Furniture		-			12,000
		623,312			831,285
Lakeview:
Building		56,255			56,255
Equipment		381,007			393,687
Mill		1,539,282			1,539,282
		1,976,544			1,989,224
Warren:
Building		379,960			378,934
Equipment		275,742			260,000
		655,702			638,934
Total		3,255,558			3,459,443
Less: Accumulated Depreciation		(1,675,106	)		(1,553,772	)
Property, Plant & Equipment, net	$	1,580,452		$	1,905,671

Depreciation expense was $177,100 for fiscal 2011, and $178,804 for fiscal 2010.

During the second quarter of fiscal 2011, the Company exchanged its 50% unencumbered interest in a commercial building in Coeur d’Alene, Idaho for certain patented lode mining claims located in the Silver Valley, Idaho commonly known as the Leadville claims. This non-monetary exchange was valued at $175,000 and the Company recorded a gain of $13,476 related to this exchange. Subsequently, in the fourth quarter of fiscal 2011, the Company sold these patented load claims for $225,000 and recorded a $50,000 gain. See Note 12 and Note 13.

During the second quarter of fiscal 2011, the Company sold for $800 a vehicle with a net book value of $524 for a gain of $276.

During the fourth quarter of fiscal 2011, the Company disposed of certain obsolete assets with a historical cost of $40,693 and accumulated depreciation of $37,856. The Company recorded a loss of $2,837 on this asset disposition.

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 6:

MINERAL AND MINING PROPERTIES

The Company currently has interests in 258 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 sales of lode claims” on the Company’s Consolidated Statements of Operations.

Lakeview District, Idaho

Idaho Lakeview, Keep Cool Group and Weber Group

The Company acquired the Lakeview and Keep Cool mining properties consisting of nine 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, $344,690, 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. During fiscal 2011, the Company issued 100,000 shares of common stock valued at $10,000 in exchange for three acres contiguous with its Lakeview mining properties. These amounts are components of the total cost of the properties of $344,690 discussed above. See Note 9.

In 1999, the Company acquired the Weber group for 100,000 shares of its common stock consisting of six 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 was expensed in prior years as an exploration expense.

Drumheller Group

The Company owns 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 originally issued 109,141 shares of its common stock to acquire these claims in February 1984.

During 2006, the Company sold the Drumheller Group of claims to an unrelated party in exchange for cash of $30,000 and a promissory note for $120,000. During 2009, due to non-payment of the note receivable, the Company received a Quitclaim Deed releasing the property that was the collateral of the note receivable. The Company determined the fair value of the reclaimed property to be $131,553 which is included in the financial statements under mining properties.

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.

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. The $757,531 cost of this property is included in the financial statements under mining properties.

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. The $927,595 cost of this property is included in the financial statements under mining properties.

Other North Idaho and Montana

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.

Montgomery Mine Group

During fiscal 2011, the Company received $50,000 related to the sale to an unrelated party of its Montgomery claims. The entire proceeds of $50,000 were accounted for as gain and presented under the caption “Net gain on the sales of lode claims” on the Company’s Consolidated Statements of Operations. See Note 13.

Stillwater Extension Claims

The Company acquired, for 100,000 shares of its common stock, 10 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 in a prior year.

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 7:

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 2011 and 2010, $76,897 and $73,235, respectively, of interest income was realized through the amortization of this note discount.

The balance on this note receivable (net of discount) was $1,614,841 at September 30, 2011.

NOTE 8:

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, 2011:

					Market
Investment	Quantity		Cost		Value

Available for Sale Securities:
Gold Crest Mines	550,100	$	713	$	5,501
Lucky Friday Extension	5,000		250		325
Merger Mines	10,000		1,400		1,500
New Jersey Mining	52,857		12,686		9,514
Subtotal	617,957		15,049		16,840

Silver Coins & Bars	61		735		1,829

Total at September 30, 2011	618,018		$ 15,784		$ 18,669

The Company’s net annual change in accumulated other comprehensive income (loss) was $54,072 during the fiscal year ended September 30, 2011. This change includes both adjustments for previously unrealized gains and losses on investments sold during the year and the unrealized gains and losses on the Company’s available-for-sale investments that are still held by the Company. The $54,072 is recorded on the statements of operations as other comprehensive income and the change is reflected in the change in accumulated other comprehensive income on the balance sheet from September 30, 2010 to September 30, 2011.

The Company realized $4,551 of net loss previously included in accumulated other comprehensive income on the sale of investments during the fiscal year ended September 30, 2011, which is reflected on the statements of operations.

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		27,875

Total at September 30, 2010	1,562,541		$ 183,621		$ 132,430

The Company’s net annual change in accumulated other comprehensive income (loss) was $39,839 during the fiscal year ended September 30, 2010. This change includes both adjustments for previously unrealized gains and losses on investments sold during the year and the unrealized gains and losses on the Company’s available-for-sale investments that are still held by the Company. The $39,839 is recorded on the statements of operations as other comprehensive income and the change is reflected in the change in accumulated other comprehensive income on the balance sheet from September 30, 2009 to September 30, 2010.

The Company realized $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, which is reflected on the statements of operations.

NOTE 9:

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 2011 Issuances

During fiscal 2011, the Company issued 100,000 shares of common in exchange for services valued at $19,000.

During fiscal 2011, the Company issued 176,000 shares of common stock to five of its directors in exchange for services valued at $35,200.

During fiscal 2011, the Company issued 7,816,667 shares of common stock to 14 investors for a total of $1,159,500 in cash. For every share purchased, each investor received one non-detachable warrant to purchase one share of common stock. 260,000 warrants are exercisable at $0.20 per share and expire on March 20, 2012. The remaining 7,556,667 warrants are exercisable at $0.25 per share and expire on August 1, 2013.

During fiscal 2011, the Company issued a total of 136,000 shares of common stock to various vendors in exchange for exploration expenses valued at $13,600.

During fiscal 2011, the Company issued 100,000 shares of common stock in exchange for mineral properties valued at $10,000.

During fiscal 2011, the Company issued 100,000 shares of common stock in exchange for prepaid mining claim lease expense valued at $10,000.

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 non-detachable 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.

NOTE 10:

TREASURY STOCK

The Company held 812,986 and 818,986 shares of treasury stock at September 30, 2011 and September 30, 2010, respectively.

Fiscal 2011 Activity

During fiscal 2011, the Company sold 40,000 treasury shares for cash of $5,694. The treasury shares had a cost of $0.11 per share.

During fiscal 2011, the Company issued 36,000 treasury shares in exchange for services valued at $5,040. The treasury shares had a cost of $0.12 per share.

During fiscal 2011, the Company purchased 70,000 treasury shares at a cost of $9,396, or $0.13 per share.

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

NOTE 11:

STOCK OPTIONS AND WARRANTS

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. 3,540,000 of these warrants expired on August 6, 2011. The remaining 3,511,550 are exercisable at $0.20 per share and expire on March 20, 2012.

During fiscal 2011, the Company issued 7,816,667 non-detachable warrants to purchase an equal number of the Company’s common stock in connection with the sale of 7,816,667 shares in private placements. 260,000 warrants are exercisable at $0.20 per share and expire on March 20, 2012. The remaining 7,556,667 warrants are exercisable at $0.25 per share and expire on August 1, 2013.

NOTE 12:

NON-MONETARY EXCHANGE

During the second quarter of fiscal 2011, the Company exchanged its 50% unencumbered interest in a commercial building in Coeur d’Alene, Idaho for certain patented lode mining claims located in the Silver Valley, Idaho. This non-monetary exchange was valued at $175,000 and the Company recorded a gain of $13,476 related to this exchange. Subsequently, in the fourth quarter of fiscal 2011, the Company sold these patented load claims for $225,000 and recorded a $50,000 gain. See Note 5.

NOTE 13:

SALES OF LODE CLAIMS

During fiscal 2011, the Company received $225,000 related to the sale to an unrelated party of its Leadville claims located in the Silver Valley. These claims were acquired during fiscal 2011 in exchange for the Company’s 50% unencumbered interest in a commercial building in Coeur d’Alene, Idaho. The Company recorded a $50,000 gain related to this sale which is presented under the caption “Net gain on the sales of lode claims” on the Company’s Consolidated Statements of Operations. See Note 12.

During fiscal 2011, the Company received $50,000 related to the sale to an unrelated party of its Montgomery claims located in Boundary County. Since the Company had previously expensed the approximately $43,557 cost to acquire and maintain this property, the entire proceeds of $50,000 were accounted for as gain and presented under the caption “Net gain on the sales of lode claims” on the Company’s Consolidated Statements of Operations.

During fiscal 2010, the Company received $175,000 related to the sale to an unrelated party of its North Osburn claims located 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 sales of lode claims” on the Company’s Consolidated Statements of Operations.

NOTE 14:

NET GAIN ON SETTLEMENT OF LEASE DISPUTE

During the first quarter of fiscal 2011, the Company was awarded a total of $100,000 as settlement of a claim the Company had filed in the Chapter 11 bankruptcy proceeds of an unrelated company. The claim asserted that the Company, as lessor, was owed compensation for the failure of the lessee to maintain proper title to the Bullion Claims with the Bureau of Land Management. During the first quarter of fiscal 2011, the Company assigned the rights to this settlement to an investment firm for net proceeds of $85,000. The net proceeds of $85,000 are presented on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) under the caption “Net gain on settlement of lease dispute”.

NOTE 15:

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 of any pending litigation or of any specific past or prospective matters which could impair the value of its mining claims.

Iola Group Claims Lease

In June 2011, the Company 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 a first year rent of $30,000 and pay a net smelter royalty of 4%-8% depending upon the price of gold. Lease payments for future years shall be $10,000 payable in May of each year. Further, the lease grants the Company an option to purchase the claims for $1,000,000. This lease agreement is filed as Exhibit No. 10.11.

Silver King LTD Lease

In June 2010, the Company 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. 10.12.

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

Idaho Lakeview, Weber, Keep Cool & Drumheller	$	3,360	$	8,942	$	-
Auxer		280		-		-
Talache		280		-		-
Shoshone		-		61		-
Bullion		-		100		-
Regal		560		-		-
Stillwater Extension Claims		1,400		-		-
Princeton Gulch Group		840		-		-
Western Gold		1,820		-		-
Gold Road		2,240		-		-
Cerro Colorado		420		-		-
Iola Group Claims		-		-		30,000
Silver King LTD Claims		-		-		10,000
Rescue Gold Mine Claims		11,760		-		-
Kimberly Gold Mine Claims		3,360		-		-
Shaft Claims		2,660		-		-
	$	28,980	$	9,103	$	40,000

NOTE 16:

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, 2011. 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, 2011, 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, 2011, 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 2011, we paid our principal executive officer $16,077. No executive officers were paid in excess of $100,000.

During fiscal 2011, we issued 176,000 shares of common stock to five of our directors in exchange for services valued at $35,200.

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, 2011, 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 51,087,704 shares of our common stock outstanding as of September 30, 2011.

	Number of
	Shares of
Name and	Common
Address	Stock
of Beneficial	Beneficially	Percentage
Owner	Owned	of Shares
Lex Smith	467,000	0.91%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Carol Stephan	1,200,856	2.35%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Melanie Farrand	396,000	0.78%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Don Rolfe	146,948	0.29%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

Ed Lehman	60,000	0.12%
C/o Shoshone Silver Mining Company
P.O. Box 2011
Coeur d'Alene, ID 83816

All officers and directors as a group (5 persons)	2,270,804	4.44%

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 $34,055 during fiscal 2011 and $48,828 during fiscal 2010.

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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

Financial Statements.

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

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.

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. ($)
10.5	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 (+)
10.11	Iola Corporation Lease and Option Agreement dated June 2011 (@)
10.12	Silver King LTD Lease and Option Agreement dated June 2010 (@)
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 Annual Report on Form 10-KSB, filed with the Commission on August 3, 2006, File No. 000-31184.
*	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 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.
+	Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the Commission on December 27, 2010, File No.000-31184.

@ Filed Herewith

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 23, 2011	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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