UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K

(Mark One)

  X .ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

.      .TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-169701

Desert Hawk Gold Corp.

(Exact name of registrant as specified in its charter)

Nevada	82-0230997
(State or other jurisdiction of incorporation or organization)	(IRS employer identification number)
1290 Holcomb Ave, Reno, NV 89502
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:  (775) 337-8057

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

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 15(d) of the Act.

Yes      . No  X .

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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      .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit an post such files).

Yes  X . No      .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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.  X .

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 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 .

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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 computed by reference to the last price at which the common stock was last sold as of the last business day of the registrant’s most recently competed second fiscal quarter was $3,262,091.

The number of shares outstanding of the registrant’s common stock on April 7, 2014, was 9,533,825.

DOCUMENTS INCORPORATED BY REFERENCE

None

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TABLE OF CONTENTS

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to Desert Hawk Gold Corp., a Nevada corporation, and its consolidated subsidiary.  All amounts in this report are in U.S. Dollars, unless otherwise indicated.

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Forward Looking Statements

The statements contained in this report that are not historical facts, including, but not limited to, statements found in the section entitled “Risk Factors,” are forward-looking statements that represent management’s beliefs and assumptions based on currently available information.  Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, potential growth opportunities, potential operating performance improvements, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations.  Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct.  Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report.  While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, the following:

·

uncertainty regarding appeal of mining permits;

·

environmental hazards;

·

metallurgical and other processing problems;

·

unusual or unexpected geological formations;

·

global economic and political conditions;

·

disruptions in credit and financial markets;

·

global productive capacity;

·

changes in product costing; and

·

competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, flooding, landslides, power outages, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities).

Mining operations are subject to a variety of existing laws and regulations relating to exploration, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with.  Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those expected.  We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

These risk factors could cause our results to differ materially from those expressed in forward-looking statements.

PART I

ITEM 1.  BUSINESS

Overview

Desert Hawk Gold Corp. (the “Company”) is an exploration stage company, which means we are engaged in the search for mineral deposits or reserves which could be economically and legally extracted or produced.  None of our mining properties have any known reserves and our proposed programs on these properties are exploratory in nature.  We were originally incorporated in the State of Idaho on November 5, 1957, under the name of Lucky Joe Mining Company.  For several years we bought and sold mining leases and claims, but in 1995 we ceased all principal business operations.  In 2001 control of the company was acquired by Robert E. Jorgensen, John Ryan, and Howard M. Crosby, who purchased a controlling number of shares and assumed management of the company for the purpose of reengaging in mining operations.  In January 2006 Mr. Jorgensen acquired sole control of the company from Messrs. Ryan and Crosby.  In 2008 we changed the domicile of the company from the State of Idaho to the State of Nevada by merging the Idaho corporation into a newly formed Nevada corporation which was incorporated on July 17, 2008.  Following the change of domicile, on April 3, 2009, we changed the name of the company to Desert Hawk Gold Corp.

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Effective April 3, 2009, we also reverse split the outstanding shares of our common stock at the rate of one share for each 12 shares outstanding (1:12).  Unless otherwise designated in this report, all common stock amounts give effect to this reverse split.

In July 2009 we entered into joint venture agreements to commence exploration activities on mining claims in the Gold Hill Mining District located in Tooele County, Utah.  We subsequently converted these joint venture agreements into lease agreements.

In December 2009 we acquired all of the outstanding stock of Blue Fin Capital, Inc., a Utah corporation owning eight unpatented lode mining claims in Arizona (“Blue Fin”).  We issued a total of 2,713,636 shares of our common stock to the shareholders of Blue Fin, which included 482,236 shares to Mr. Jorgensen, our CEO, 1,000,000 shares to Rick Havenstrite, our President, and 1,131,400 shares to Eric L. Moe, who became one of our directors subsequent to this transaction, all of whom were shareholders of Blue Fin at the time of the acquisition.  The closing of the transaction occurred on December 31, 2009, and Blue Fin became a wholly owned subsidiary of Desert Hawk.  The transaction was approved by a majority of the disinterested directors who determined that the claims would have value to the Company at least equal to the par value at the time of the shares issued.  We have been unable to secure funding for exploration of these properties and do not consider these properties material at present because of the inability to raise funds for further exploration. These claims were subsequently dropped.

From 2008 through 2013, we funded our operations through the sale of our common stock and promissory notes.  In May 2008 we conducted a non-public offering of shares of our common stock.  We sold 289,584 shares and raised $173,750 in gross proceeds to recommence mining operations.  In May 2009 we offered and sold 1,000,000 shares of our common stock in a non-public offering and raised $700,000 in gross proceeds to meet our cash obligations under the joint venture and lease agreements with Clifton Mining and Moeller Family Trust (described below) and to commence exploration operations on the property.  In September 2009 we conducted another non-public offering of our common stock.  We sold 440,000 shares and raised gross proceeds of $308,000 in an offering to conduct a drilling program on our mining properties.  In November of 2009, we borrowed $600,000 from two investors and issued 15% convertible promissory notes for this principal amount.  The promissory notes matured on November 30, 2012, and were convertible at $0.70 per share.  We failed to repay either of these notes on the maturity date of the notes, and have issued an additional 300,000 shares of our common stock to each of the two investors and the maturity dates were extended for two, one-year terms, as per the terms of the notes and the notes are now due on November 30. 2014.  Interest on the notes (accrued monthly and paid quarterly) will continue to be paid by us, with stock, during the extended period of the notes.

In July 2010, as described in more detail below, we entered into a financing arrangement with DMRJ Group I, LLC to provide up to $6,500,000 in funding for our Gold Hill mining properties.  This arrangement has been amended several times and remains in effect.

In addition to the financing arrangement with DMRJ Group, we continue to fund operations through the sale of our common stock.  In January 2012 we completed a non-public offering in which we sold a total of 309,420 shares for gross proceeds of $355,833.  An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of our common stock.  This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of our common stock.  Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.  Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.  Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.

In each non-public offering by us, the securities offered were not and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.  

Acquisition of Utah Mining Claims and Leases

Clifton Mining Company and Woodman Mining Company Lease Agreement

On July 24, 2009, we entered into a Joint Venture Agreement with the Clifton Mining Company and Woodman Mining Company under which Clifton Mining granted to us exclusive possession of certain patented and unpatented mining claims and an unpatented mill site claim and certain Utah state mineral leases covering lands in the Gold Hill Mining District located in Tooele County, Utah, for exploration, development and mining, and the right to occupy the properties and to explore, develop and mine the properties for minerals.  Woodman Mining also granted us the same rights in certain of these patented mining claims owned jointly with Clifton Mining.  These combined interests included 419 unpatented load and placer mining claims, including an unpatented mill site claim, 38 patented claims, and seven Utah state mineral leases located on state trust lands.  Under the terms of the Joint Venture Agreement, we paid $250,000 to Clifton Mining on or about July 15, 2009.  Additionally, we issued 500,000 shares of our common stock to Clifton Mining for the rights on the Kiewit gold property included in the Joint Venture Agreement.  These shares are subject to a six-year lockup and leak-out agreement which prevents Clifton Mining from selling shares publicly for a period of one year from the original filing date of the S-1 registration statement filed on September 30, 2010.  Thereafter, Clifton Mining may sell up to 20% of these shares during any 12-month period.

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In June 2010, the parties to the Joint Venture Agreement entered into an Amended and Restated Lease and Sublease Agreement effective as of the date of the original Joint Venture Agreement.  The Amended and Restated Lease and Sublease Agreement restated and replaced the original Joint Venture Agreement.  The amended agreement provides for the lease to us of the patented and unpatented claims, including the mill site, and the sublease of the state mineral leases.  The amended agreement also grants to us the right to enter onto the land to conduct our exploration activities, the right to make reasonable use of the surface of the properties for these activities, the right to transport on and across the surface of the properties any mineralized material, and the right to destroy so much of the surface and subsurface as may be reasonably necessary to carry out the purposes of the agreement.  The term of the amended agreement is for 20 years from its effective date and for so long as we continue to produce and sell mineralized material or mineral resources from the property, unless sooner terminated as provided in the amended agreement.  We do not have the right to assign, sublease or otherwise transfer our interest in the amended agreement without the prior written consent of Clifton Mining as to those of the properties owned by it and without the prior written consent of Woodman Mining as to those of the properties owned by it.  Nevertheless we may mortgage or pledge our leasehold interest in the Kiewit Claims and the Cactus Mill Property for purposes of financing exploration, development and mining operations, but we cannot otherwise encumber the property without the written consent of Clifton Mining.

Under the terms of the amended agreement, we are obligated to pay a 4% net smelter royalty on base metals in all areas except for extraction of mineralized material from the Kiewit gold property and a net smelter royalty on gold and silver, except for extraction of mineralized material from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable.  We are also obligated to pay a 6% net smelter return on any mineralized material extracted from the Kiewit gold property.  Beginning with 2010, we are required to make all lease property payments by submitting payment on a per claim basis on or before July 15^th of each year during the term of the Agreement.  During 2013, we paid a total of $37,124 in claims fees pursuant to the amended agreement.  If we do not place the Kiewit property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three-year period from the date of the agreement, we will be required to make annual payments to Clifton Mining of $50,000 per property, to retain our rights to those properties.  The amended agreement also requires Clifton Mining to make available to us for our use all historical geological, engineering, and other data on the properties, as well as all buildings, equipment, existing permits, and water rights necessary for operations.  Clifton Mining has the right to terminate the Amended and Restated Lease and Sublease Agreement only if we fail to comply with the terms of the agreement and we fail to correct any breach of the agreement after 30 days’ notice from Clifton Mining.

On June 30, 2012, we entered into an arrangement with Clifton Mining Company and Woodman Mining to delay certain payments required pursuant to the terms of the Amended and Restated Lease and Sublease Agreement and to extend the declaration date for claims to be voluntarily released under the agreement. As part of this agreement, the $50,000 payments for the annual holding fees for the Kiewit and the Clifton Shears-Smelter Tunnel properties were made in accordance with the June 30, 2012 delayed payment arrangement.  A partial payment of $10,000 was made on December 24, 2012 for the Cane Springs payment.  In 2013, the annual holding fee payments for the Kiewit and Clifton Shears-Smelter Tunnel properties were timely made in July.  The Cane Springs payment has not yet been made for the Cane Springs property.  This payment is currently being negotiated with the leaseholder.  Notice was timely given of the claims we no longer wish to maintain and the Bureau of Land Management (“BLM”) reimbursement was also timely made.  

We may surrender the lease as to all or any part of the leased property, after proper reclamation of all portions of the land to be surrendered affected by our operations.  The lease also provides that the lessors, Clifton Mining and Woodman Mining, will be responsible for any and all liability that may exist under certain encumbrances and will indemnify us and our affiliates, officers, directors, employees, shareholders and agents from and against loss of leasehold title or other actual losses that we may incur on account of the existence or enforcement of any rights under these potential encumbrances.

Prior to July 1, 2010, we notified Clifton Mining that we would surrender certain of the mining claims and leases originally obtained in our lease agreement with it.  For 2013 we paid the annual maintenance fees on 247 of the original 419 unpatented mining claims which were the subject of the original lease.  

Moeller Family Trust Lease Agreement

Also on July 24, 2009, we entered into a Joint Venture Agreement with the Jeneane C. Moeller Family Trust under which the trust granted to us exclusive possession of four patented mining claims covering lands in the Gold Hill Mining District located in Tooele County, Utah, for exploration, development and mining, and the right to occupy the properties and to explore, develop and mine the properties for minerals.  These properties are known as the Yellow Hammer claims.  Under the terms of the Joint Venture Agreement, we issued 250,000 shares of our common stock for the rights granted to us in the Joint Venture Agreement.  These shares are subject to a six-year lockup and leak-out agreement which prevents the trust from selling shares publicly for a period of one year from the original filing date of the Form S-1 Registration Statement filed on September 30, 2010.  Thereafter, the trust may sell up to 20% of these shares during any 12-month period.

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In June 2010, the parties to this Joint Venture Agreement entered into an Amended and Restated Lease Agreement effective as of the date of the original Joint Venture Agreement.  The Amended and Restated Lease Agreement restated and replaced the original Joint Venture Agreement.  The amended agreement provides for the lease to us of the patented Yellow Hammer claims.  The amended agreement also grants to us the right to enter onto the land to conduct our exploration activities, the right to make reasonable use of the surface of the properties for these activities, the right to transport on and across the surface of the properties any mineralized material, and the right to destroy so much of the surface and subsurface as may be reasonably necessary to carry out the purposes of the agreement.  The term of the amended agreement is for 20 years from its effective date and for so long as we continue to produce and sell mineralized material or mineral resources from the property, unless sooner terminated as provided in the amended agreement.  We do not have the right to assign, sublease or otherwise transfer our interest in the amended agreement without the prior written consent of the trust.  Nevertheless we may mortgage or pledge our leasehold interest in the Yellow Hammer claims for purposes of financing exploration, development and mining operations, but we cannot otherwise encumber the property without the written consent of the trust.

Under the terms of the amended agreement, we are required to pay a 6% net smelter royalty on base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable.  Beginning with 2010, we are required to make all property payments.  If we do not place the property into commercial production within a three-year period from the date of the original agreement, we will be required to make annual payments to the trust of $50,000 per property to retain our rights to those properties.  The amended agreement also requires the trust to make available to us for our use all historical geological, engineering, and other data on the properties.  The trust has the right to terminate the Amended and Restated Lease Agreement only if we fail to comply with the terms of the agreement and we fail to correct any breach of the agreement after 30 days’ notice from the trust.

We may surrender the lease as to all or any part of the leased property, after proper reclamation of all portions of the land to be surrendered affected by our operations.  The lease also provides that the lessor, the Moeller Family Trust, will be responsible for any and all liability that may exist under certain encumbrances and will indemnify us and our affiliates, officers, directors, employees, shareholders and agents from and against loss of leasehold title or other actual losses that we may incur on account of the existence or enforcement of any rights under these potential encumbrances.

We have not paid the $50,000 minimum annual fee due and the amended agreement is subject to termination.  The Moeller Family Trust has not formally given notice of termination of this agreement.

DMRJ Group Investment Agreement

On July 14, 2010, we entered into an Investment Agreement (the “Investment Agreement”) with DMRJ Group I, LLC, a Delaware limited liability company (“DMRJ Group”).  Under the terms of the Investment Agreement, DMRJ Group committed to loan us up to $6,500,000 under certain terms and conditions.  These loan advances can only be used by us to pay transaction fees and expenses incurred in connection with the loan transaction, to purchase certain mining equipment, and as working capital to advance our Yellow Hammer and Kiewit mining activities.  The maximum amounts originally allocable to our Yellow Hammer and Kiewit projects were $2,500,000 and $2,750,000, respectively, and were subject to meeting certain milestones on the projects.  The balance of the funds borrowed from DMRJ Group could be used for capital and operating expenses.  Under the original loan agreement we received five loan advances from DMRJ Group for $500,000 each for an aggregate of $2,500,000, plus an aggregate of $441,176 in prepaid interest paid to DMRJ Group.

Each advance amount bears interest of 15% per annum from the date of borrowing.  Unless waived by DMRJ Group, we are required to prepay interest on any advance that would accrue during the first year following the advance, or a shorter period if the advance is less than one year prior to the maturity date of the promissory note.  This prepayment of interest is nonrefundable even if we prepay the advance.  Following this one-year period, interest on the advance accrues monthly until the advance is repaid in full.  In addition, at the time we repay or prepay the advance, we are required to pay an additional amount equal to 20% of the principal amount being repaid or prepaid (repayment premium or payment date interest).  Upon an event of default, the interest rate on the outstanding principal amount increases to 25%.

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The Investment Agreement contains certain affirmative covenants we are required to meet in order to avoid an event of default under the agreement, including the following:

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Maintain the existence of our business and properties;

·

Keep our properties insured;

·

Pay and discharge promptly all material taxes;

·

Furnish copies of our annual and quarterly financial statements;

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Furnish notice of any event of default under the agreement or the commencement or threat of any litigation;

·

Comply with all rules and regulations applicable to our properties, including our mining claims and leases;

·

Maintain proper books and records, including financial records;

·

Use the proceeds of the loan advances for the purposes described in the agreement;

·

Comply with all environmental laws applicable to our mining operations; and

·

Keep all mining claims and leases in full force and effect.

The Investment Agreement further contains certain negative covenants which prohibit us from the following actions or activities:

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Incurring any indebtedness except in limited circumstances;

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Creating any significant liens on any of our properties or assets;

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Enter into any sale and lease-back transaction involving any of our properties;

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Make any investments in or loans or advances to other parties;

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Engage in any merger, consolidation, sale of assets or acquisition transaction, except for the purchase or sale of inventory or certain limited investments;

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Declare or pay any dividends, except for dividends to DMRJ Group;

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Engage in any business transactions with affiliates;

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Make capital expenditures except as permitted in the agreement pertaining to our current mining business;

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Create any lease obligations;

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Amend, supplement or modify any existing indebtedness;

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Enter into any swap, forward, future or derivative transaction;

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Make any change in our accounting policies or reporting practices;

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Form additional subsidiaries; or

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Modify or grant a waiver or release under or terminate any principal lease agreement or other material contract.

An event of default will occur under the terms of the Investment Agreement if any representation or warranty made by us in the transaction documents with DMRJ Group proves to be false or misleading in any material respect, if we fail to make required payments under the loan documents, if we fail to observe the covenants made in the Agreement, if a change of control occurs, if a voluntary or involuntary insolvency action is commenced, or if a change of control of our Company occurs.  In the case of an event of default, DMRJ Group may, upon prior written notice, terminate or suspend its commitment for further loan advances, declare the outstanding loan advances to be immediately due and payable, or exercise any other remedies legally available.

Pursuant to a Security Agreement with DMRJ Group dated July 14, 2010 (the “Security Agreement”), we have secured the repayment of any advances made by DMRJ Group with all of our assets, including our shares of Blue Fin Capital, Inc., our wholly owned subsidiary, which shares have been pledged as collateral for the advances pursuant to a Pledge Agreement dated July 14, 2010 (the “Pledge Agreement”).  As the secured party, DMRJ Group is appointed as attorney in fact to foreclose on and deal with our assets in the event of default.

As additional consideration for DMRJ Group entering into the original Investment Agreement with us, we issued 958,033 shares of our Series A Preferred Stock to the lender and entered into a Registration Rights Agreement dated July 14, 2010 (the “Registration Rights Agreement”), to register, either upon demand or by piggyback, the resale of the common shares issuable upon conversion of the Series A shares.  These preferred shares are convertible into shares of our common stock at the rate of one common share for each preferred share converted, subject to adjustment in the event we issue common shares or instruments exercisable or convertible into common shares at a price less than $0.70 per share, or if we effect a reverse or forward split of our outstanding shares or a reclassification of our common stock.

In connection with the loan transaction, two of our prior lenders, West C Street, LLC and Ibearhouse, LLC, each of whom had loaned $300,000 to us in 2009, agreed to subordinate their debt to DMRJ Group.  In consideration for their agreement to subordinate their loans, we reduced the conversion price of the loans from $1.50 to $0.70 per share.  On July 14, 2010, we issued amended and restated promissory notes to West C Street and Ibearhouse reflecting the reduced conversion price and acknowledging the subordination to the DMRJ Group financing.

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On November 8, 2010, we amended the original Investment Agreement to eliminate a milestone to receive the final two loan advances for the Yellow Hammer project or to avoid an event of default if this amount was not produced by mid-December 2010.  We revised the mineral production levels, cash flows, and operating expenses based solely on the estimated mineralized material to be processed at the pilot mill.  

On February 25, 2011, we entered into a Second Amendment to the Investment Agreement.  This amendment allowed us to make a further request for a term loan advance under the Investment Agreement of up to $125,000 without satisfying the provisions requiring us to meet certain milestones in connection with our Kiewit properties and permitting us to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  

On March 11, 2011, we entered into a Third Amendment to the Investment Agreement.  This amendment allowed us to make a further request for a term loan advance under the Investment Agreement of up to $500,000 without satisfying the provisions requiring us to meet certain milestones in connection with our Kiewit properties and permitting us to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  Two $125,000 advances were received as part of this amendment.  These advances were not deemed to be Kiewit advances, meaning that they are not subject to the mandatory prepayment requirements under the Investment Agreement.

On May 3, 2011, we entered into a Fourth Amendment to the Investment Agreement.  The Fourth Amendment allows us to make a further request for a term loan advance under the Investment Agreement of up to $735,295, including $110,295 of prepaid interest, and any remaining amounts previously permitted under the Third Amendment, without satisfying the provisions requiring us to meet certain milestones in connection with our Kiewit properties and permitting us to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  

We have considered the impact of ASC 470-50 “Debt-Modifications and Extinguishments” on the accounting treatment of the Fourth Amendment to the Investment Agreement. ASC 470-50 states that a transaction resulting in a significant change in the nature of a debt instrument should be accounted for as an extinguishment of debt. The difference between the reacquisition price and the net carrying amount of the extinguished debt should be recognized currently in income of the period of extinguishment. We have concluded that the amendment constituted a substantial modification. During the quarter ended June 30, 2011, the Company recognized a loss on extinguishment of the DMRJ note of $2,149,404 representing the difference between the fair value of the amended note, including consideration and fees, and the carrying value of the original note, including related unamortized discount.

Under the terms of the Fourth Amendment, a total of $5,865,492 was due as follows:

Date		Yellow Hammer Advances			Bridge Advances			Total
6/30/2012		$	1,147,403		$	402,597		$	1,550,000
9/30/2012			2,180,065			764,935			2,945,000
12/31/2012			1,014,520			355,972			1,370,492
		$	4,341,988		$	1,523,504		$	5,865,492

In the event we completed an equity financing with net proceeds of more than $3,000,000, DMRJ Group would have the option to require us to pay 25% of the proceeds to satisfy our indebtedness to it.

Pursuant to the Fourth Amendment, the Yellowhammer advances made by DMRJ Group to us, including accrued and unpaid interest thereon, are convertible into our Series A-1 Preferred Shares at any time into the number of shares of Series A-1 preferred stock determined by dividing the amount of advances being converted by 10 times the conversion price effective at the time of the conversion.  Also, the advances made under the Fourth Amendment, plus prior advances made under the Second and Third Amendments, including accrued and unpaid interest thereon, are convertible into shares of Series A-2 preferred stock determined by dividing the amount of advances being converted by 10 times the conversion price effective at the time of the conversion.

In accordance with the terms of the Fourth Amendment, we also entered into a Registration Rights Agreement pursuant to which we granted demand and piggyback registration rights to DMRJ Group for the common shares issuable upon conversion of the Series A-1 and A-2 Preferred Stock.  Also, we issued 100,000 shares of our Series A-2 Preferred Stock to DMRJ Group as consideration for entering into the Fourth Amendment.

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As a condition of closing the Fourth Amendment to the Investment Agreement, we also agreed to limit the number of directors to seven persons, two of which will be designated by the holders of the Series A-1 and A-2 Preferred Stock.  As a result, we appointed Dan Small and David Levy, affiliates of DMRJ Group, as directors.

In addition, as part of the Fourth Amendment, beginning July 1, 2011, quarterly dividends in the amount of 10% of net income are due to all Series A-1 and A-2 preferred stockholders for each quarter that the Company has consolidated net income.  We also cannot pay any dividends on the common stock until the preferred dividends are paid.  As of December 31, 2013, no dividends have been paid by us.  

On June 29, 2012, we entered into a forbearance agreement with DMRJ Group which extended the due date of the June 30, 2012 loan payment to September 30, 2012 in exchange for 80,000 shares of Series A-2 Preferred Stock.  Pursuant to the Investment Agreement, on June 30, 2012, we had been obligated to repay $1,550,000 of the funds previously loaned to us by DMRJ Group.  Pursuant to the forbearance agreement, DMRJ Group agreed to forbear from exercising its rights relating to a payment default if the payment due on June 30, 2012 was not paid.  The Company failed to make the payment on June 30, 2012, and therefore an event of default occurred under the terms of the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Because the terms of the forbearance agreement were not met, it was terminated on July 31, 2012.

The Company failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Under the Investment Agreement, DMRJ Group therefore has the right, at its option, to notify the Company and declare the full amount of all of the loans immediately due and payable, foreclose on the security for the loans, or exercise any other legal rights based upon breach of the Investment Agreement.  DMRJ Group has not notified the Company of its intent to exercise any of its rights based upon default of the Company under the Investment Agreement.

On October 17, 2012, the Company entered into a Fifth Amendment to the Investment Agreement with DMRJ Group.  The Fifth Amendment provided for the Company to receive up to $100,000 in additional funds in two advances (the “October Term Loan Advances”) of $50,000 each.  Only one of these $50,000 advances was taken in 2012.  The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ was moved from December 31, 2012 to December 15, 2012.  The amount to be due under the Fifth Amendment for the prior balance due was $5,865,492 as of October 17, 2012; plus the $50,000 October Term Loan Advance and accrued interest on the entire amount at 2% per month.  This amount was not paid on December 15, 2012 and remained unpaid at December 31, 2012, with total principal due of $5,915,492 and accrued interest due of $298,606 resulting in a total due of $6,214,098.  

On January 29, 2013, we entered into a Sixth Amendment to the Investment Agreement with DMRJ Group.  The Sixth Amendment provided for us to receive additional funds in one advance (the “January Term Loan Advance”) of $50,000. This advance replaced the second October Term Loan Advance, which had never been drawn.  The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ was moved from December 15, 2012 to March 5, 2013.  

On April 30, 2013, we agreed to the terms of a Seventh Amendment to the Investment Agreement with DMRJ Group.  This Amendment became effective on June 26, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from March 5, 2013 to June 30, 2013.  The Seventh Amendment provided for us to receive additional funds in two advances of $50,000.  The first advance, the “April Term Loan Advance”, was received on May 2, 2013 and the second advance, the “May Term Loan Advance” was received on June 26, 2013.  The June 30, 2013 loan payment was not made.  

On July 24, 2013, we agreed to the terms of an Eighth Amendment to the Investment Agreement with DMRJ Group.  This Amendment became effective on July 24, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from June 30, 2013 to September 30, 2013.  The Eighth Amendment provided for us to receive additional funds in two advances.  The first advance, the “July Term Loan Advance”, in the amount of $100,000, was received on July 24, 2013 and the second advance, the “Additional July Term Loan Advance” was received on August 23, 2013 in the amount of $50,000.  

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The September 30, 2013 payment was not made and a Ninth Amendment to the Investment Agreement was entered into on October 24, 2013.  As a provision of this amendment the maturity date of the entire loan balance due to DMRJ Group was moved from September 30, 2013 to January 31, 2014.  The Ninth Amendment provided for the Company to receive additional funds in four advances of $25,000 each. The advances, designated the “October 2013 Term Loan Advances” were to be used for ordinary course general corporate purposes. The advances could be drawn for four successive calendar months commencing in October 2013 in the aggregate principal amount of $25,000 each for an aggregate of up to $100,000.  The interest rate on these advances remains at 2% per month. Two of these advances were drawn in 2013, with a third draw taken in January 2014.  The January 31, 2014 loan payment was not made.

On February 19, 2014, we agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group.  The Tenth Amendment provides for funding of mining operations through a series of Monthly Term Loan Advances totaling a maximum of $5,700,000 over four months.  As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016.  The interest rate on the loan balance was reduced from 24% to 15% and minimum payment amounts were established beginning in February 2015.  On the last business day of each month, commencing October 31, 2014, we shall pay to the Investor an amount equal to 100% of all cash flows from operations for the immediately preceding month, if any, less mutually agreed upon capital expenditures (and if an agreement on capital expenditures is not reached, then 100% of cash flows from operations) subject to a minimum cash balance of $200,000 until such time as the unpaid principal amount of all Term Loan Advances outstanding and all accrued interest has been paid in full.  All payments will be applied first to accrued but unpaid interest and second to outstanding principal.  The first Monthly Term Loan, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit.  Onsite development of the project has since begun. If we are unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate our mining leases and other assets.

In addition, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock. The Company amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude from the definition of convertible securities, the shares of Series A Preferred Stock and the Series A-2 Preferred Stock previously issued to DMRJ Group and any future issuances of any shares of Series A, Series, B, and Series A-1 and A-2 to DMRJ Group or any of its affiliates.

If we lose our mining leases and other assets to DMRJ Group in foreclosure, we will not be able to continue our business operations as currently planned and any shareholder would lose their entire investment in our common stock.

Operations

Refurbishing of our Cactus Mill pilot plant was completed in the fall of 2010 and processing of mineralized material was ongoing through December of 2011.  Mineralized material from the Yellow Hammer Mine was hauled to the pilot plant where it went through a floatation process to obtain a concentrate.  The concentrate was then shipped to Asarco’s Hayden, Arizona smelter plant for processing of copper, gold, and silver.  Tailings from this mineralized material were then reprocessed through the floatation cycle and gravity tables to obtain tungsten material which was shipped to Buffalo Tungsten for further processing.  Test operations at the pilot mill were suspended in December 2011.  

On January 7, 2014, we received final approval from the BLM of the Kiewit Large Mine Permit which allows us to develop the Kiewit deposit and put it into production.  On February 20, 2014, we posted the reclamation bond for this project in the amount of $1,348,000. We intend to commence construction on a 750,000 square foot heap leach pad and process facility in first quarter 2014.  Production is targeted for fourth quarter 2014.

Competition

The precious metal exploration and mining industry is highly fragmented.  We expect to compete with many other exploration companies looking for copper, gold, silver, tungsten, and other minerals.  We are among the smallest of the exploration companies in existence and are a very small participant in the precious metal industry.  However, we generally expect to compete favorably with other exploration companies since the claims held by us in the Gold Hill Mining District consolidate the principal mining areas and limit the ability of other exploration companies to commence material exploration activities in the district.  Furthermore, if we are able to successfully recover copper, gold and other by-products from our claims, it is likely that we will be able to sell all minerals that we are able to recover.

Copper mining is a significant industry in Utah.  In particular, we will be competing with Rio Tinto which operates the Kennecott Copper Mine, one of the largest open pit copper mines in the world, located in Salt Lake County, Utah.  However, management believes the market for copper is sufficiently strong to accommodate any mineralized material which we may extract.

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The property is located reasonably near a populated area from which it will be able to draw manpower and supplies.  Management does not currently have customers for any copper, gold, silver, or other minerals which we may produce.  We anticipate that markets for these minerals are readily available and do not anticipate difficulty in selling any concentrates of mineralized material which we may extract.  Notwithstanding this, management will need to evaluate transportation methods and costs when it obtains potential customers to determine whether existing prices for the mineralized materials would make sales to such customers economically viable.

Government Compliance

Our operations are subject to extensive federal and state laws and regulations designed to conserve and prevent the degradation of the environment.  These laws and regulations require obtaining various permits before undertaking certain exploration or mining activities and may result in significant delays, substantial costs and the alteration of proposed operating plans.  As discussed below under Permits, we have retained North American Exploration, Inc. and JBR Environmental Consultants, Inc. to assist us in obtaining the necessary mining and environmental permits and clearances.  Meeting these regulatory requirements necessitates significant capital outlay.  In addition, obtaining these environmental permits does not eliminate liability of the owner and operator of the property for damages that may result from specific operations or from contamination of the environment.

Our Cactus Mill pilot plant and the Kiewit claims are located on unpatented claims located on federal land, which also requires compliance with applicable requirements administered by the BLM.  These regulations impose specific conditions on the nature and extent of surface disturbance, the manner in which exploration and mining can be conducted, the disposition of spent mineralized material, the use and containment of chemical leaching agents and other solutions, spill prevention, liquid and solid waste disposition, ground water monitoring, and a number of other matters which if violated could result in fines, penalties or attendant adverse publicity.

We are also obligated to make annual payments to the BLM for each of our unpatented mining claims on federal land and to record an affidavit in the Tooele County Recorder’s Office reflecting the payment of the annual maintenance fees to the BLM and stating our intention to hold the claims.  The 2013 annual maintenance fee payable to the BLM on our unpatented claims was $34,580 and was paid in August 2013.  The required affidavit was filed with the Tooele County Recorder on August 26, 2013.  Proposals repeatedly have been introduced in Congress that would substantially modify the Mining Law of 1872, the statute pursuant to which unpatented mining claims are located and maintained.  Bills have been introduced, but have not passed, that would require, among other things, the payment of royalties to the United States.  Property taxes on the patented claims were $6,062 for 2013 and the mineral lease fees were $2,545.  We anticipate that the annual maintenance fees will not significantly increase in 2014, however the personal property taxes are expected to increase due to the addition of machinery and equipment which will be purchased as we commence development.

Mining and exploration operations are also subject to both federal and state laws and regulations pertaining to employee health and safety.  We employ a mine safety administrator to monitor our obligations under these laws and regulations.

Intellectual Property Rights

We own the Marks “DESERT HAWK” and “DESERT HAWK GOLD CORP” and also own corresponding federal trademark filing Serial Nos. 85/232,815, 85,232,819, 85/232,820, and 85/232,823, for use in connection with mining extraction, consulting in the fields of mining and milling, milling of ore, mining exploration and mineral exploration, copper ore, gold ore, silver ore, and tungsten ore.

Employees

At December 31, 2013, we had two employees, including our President, Rick Havenstrite, who devotes approximately 80% of his time or 40 hours per week for his business.  We also engaged Marianne Havenstrite, wife of Rick Havenstrite, on a part-time basis, as our Treasurer and Principal Financial Officer.  Both of these employees have accrued all of their wages throughout part of 2012 and all of 2013. They are based out of our Reno, Nevada office.  In February of 2014, we added several employees to begin construction of the Kiewit project.  These employees will work at our Gold Hill project site or in the Reno, Nevada office.

ITEM 1A.  RISK FACTORS

The following risks and uncertainties, together with the other information set forth in this Form 10-K, should be carefully considered by those who invest in our securities.  Any of the following risks could materially and adversely affect our business, financial condition or operating results and could decrease the value of our Common and/or Preferred Stock.

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Risks Relating to Our Business

The Amended and Restated Promissory Note with DMRJ Group, in the principle amount of $11,989,492, matures on October 31, 2016. There is no certainty we will be able to enter into further amendments to the Note and there is also no certainty we will be able to generate enough income to pay the amount owed by the maturity date. If we fail to pay the Note by the maturity date and do not enter into further amendments to the Note with DMRJ Group, DMRJ Group will have the ability to foreclose on our mining claims at any time, and if DMRJ Group forecloses on our mining claims, our business could fail.

In conjunction with entering into the Tenth Amendment to the Investment Agreement with DMRJ Group, the Company entered into an Amended and Restated Promissory Note (the “Note”) with DMRJ Group. The principle amount of the Note is $11,989,492 and is due by October 31, 2016.  Our loan advances from DMRJ Group under the Investment Agreement, as amended, are secured by all of our assets, including our mining leases and equipment.  The Investment Agreement, as amended, also contains numerous affirmative and negative covenants which require us to perform certain obligations or refrain from certain actions so long as any amounts are owed to DMRJ Group under the Investment Agreement, as amended.  If we fail to meet all of our covenants under the agreement or if we fail to make any required payment of principal or interest when due, it is likely that DMRJ Group would call the full amount of the outstanding balances on our loans immediately due.  If we are unable to repay the outstanding balances at that time, we anticipate that DMRJ Group would foreclose on its security interest and would likely take control of or liquidate our mining leases and other assets.  Because the Investment Agreement, as amended, limits our ability to obtain outside funds during the effective period of the Investment Agreement, it is possible that we would not be able to obtain alternate financing to satisfy the obligations owed to DMRJ Group in the event of foreclosure.  If we lose our mining leases and other assets to DMRJ Group in foreclosure, we would not be able to continue our business operations as currently planned and an investor would lose its entire investment in our common stock.

We may be denied government licenses and permits which we need to explore on and further develop our property.  Continued delays in obtaining necessary operating permits could have a material negative impact on our ability to extract mineralized material from our claims.  In the event that we discover commercially exploitable deposits, we may be denied the additional government licenses and permits which we will need to mine on our property.  If we are not granted the necessary permits, our business could fail.

Exploration activities usually require the granting of permits from various governmental agencies.  For example, exploration drilling on unpatented mineral claims requires a permit to be obtained from the United States Bureau of Land Management, which may take several months or longer to grant the requested permit.  Depending on the size, location and scope of the exploration program, additional permits may also be required before exploration activities can be undertaken.  Prehistoric or Indian grave yards, threatened or endangered species, archeological sites or the possibility thereof, difficult access, excessive dust and important nearby water resources may all result in the need for additional permits before exploration activities can commence.  As with all permitting processes, there is the risk that unexpected delays and excessive costs may be experienced in obtaining required permits.  The needed permits may not be granted at all.  We have experienced substantial delays in obtaining the necessary operating permits to commence operations on our claims. To date, 20 permits and licenses have been obtained for the development of the project.  The reclamation permit, submitted to the Utah Division of Oil, Gas, and Mining (“DOGM”) in February 2010, has been approved.  The BLM has approved the mine plan as complete and it has been reviewed by the National Environmental Protection Agency (“NEPA”).  We were granted the final Kiewit Large Mine Operations permit by the BLM on February 19, 2014 and have posted the reclamation bond necessary to proceed with operations.

On March 20, 2013, the Confederated Tribes of the Goshute Reservation (the “Tribes”) sent a letter to the BLM outlining their review of the Kiewit Mine Project Draft Environmental Assessment.  The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources.  On February 6, 2014 the Tribes filed an appeal of the permit with the BLM.  The BLM will defend their case against the appeal; however, there is no assurance the BLM will prevail against the Tribes.  If we are not able to secure and retain the necessary mining permits, we may not be able to continue operations and our business could fail.

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If the funding from DMRJ Group is insufficient to commence profitable operations, we will need to obtain additional financing to fund our exploration program.

We have no firm commitments or agreements to provide additional funding to have sufficient capital to fund our exploration program as it is currently planned or to fund the acquisition and exploration of new properties.  Due to the Investment Agreement, as amended, with DMRJ Group, our ability to obtain additional financing is restricted. We also may be unable to secure additional financing on terms acceptable to us, or at all.  Our inability to raise additional funds on a timely basis could prevent us from achieving our business objectives and could have a negative impact on our business, financial condition, results of operations and the value of our securities.  If we raise additional funds by issuing additional equity or convertible debt securities, the ownership of existing stockholders may be diluted and the securities that we may issue in the future may have rights, preferences or privileges senior to those of the current holders of our common stock.  Such securities may also be issued at a discount to the fair market value of our common stock, resulting in possible further dilution to the book value per share of common stock.  If we raise additional funds by issuing debt, we could be subject to debt covenants that could place limitations on our operations and financial flexibility.  Certain of our outstanding securities contain protections from issuances of additional securities below $0.70 per share which could result in additional shares being issued in the event of sales of equity or equity-linked securities below such price.

We are an exploration stage company and have only recently commenced exploration activities on our claims.  We expect to incur operating losses for the foreseeable future.

Our evaluation of the Gold Hill mining claims is primarily a result of historical exploration data.  Although we have made field observations, our exploration program is in its early stages.  Accordingly, we are not yet in a position to estimate expected amounts of minerals, yields or values or evaluate the likelihood that our business will be successful.  We have earned limited revenues from mining operations through sales of concentrate.  There are a number of difficulties normally encountered by early stage mineral exploration companies and there is a high rate of failure of such enterprises.  Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake.  These potential difficulties include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses while realizing limited revenues.  We recognize that if we are unable to generate significant revenues from our claims and properties, we will not be able to earn profits or continue operations.  There is no history upon which to base any assumption as to the likelihood that we will prove successful.  If we are unsuccessful in addressing these risks, our business could fail.

Because of our continued losses, there are doubts as to whether we will continue as a going concern.

Our ability to obtain additional financing, the successful development of our contemplated plan of operations and our ability to establish profitability create substantial doubt as to our ability to continue as a going concern and there continues to be substantial doubt as of the date hereof of our ability to continue as a going concern.  Future issuances of our equity and/or debt securities will be required in order for us to continue to finance our operations and we expect to incur additional losses for the foreseeable future.  We currently have insufficient revenues to meet our operating expenses.

The global financial crisis may have an impact on our business and financial condition in ways that we currently cannot predict.

The continued credit crisis and related turmoil in the global financial system may have an impact on our business and financial position.  The recent high costs of fuel and other consumables may negatively impact costs of our operations.  In addition, the financial crisis may limit our ability to raise capital through credit and equity markets.  The prices of the metals and resources that we seek to discover and exploit are affected by a number of factors, and it is unknown how these factors will be impacted by a continuation of the financial crisis.

Our management may have conflicts of interest and only devote a portion of their business time to us which could materially and adversely affect us and our business.

Most of our management does not work for us exclusively and some serve on the boards of other companies.  We do not consider any of these other companies to be our competitors.  It is possible that a conflict of interest may arise based on management’s other employment or board activities, including affiliation with DMRJ Group, our majority shareholder.  Situations may arise where members of our management are presented with business opportunities which may be desirable not only for us, but also for the other companies with which they are affiliated.  We have adopted a Code of Ethics for the review and approval of any transactions that cause a conflict of interest.

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We do not know if our properties contain any copper, gold, silver, tungsten, or other precious minerals that can be mined at a profit.

The properties on which we have the right to explore for precious minerals are not known to have any proven or probable reserves.  Whether a precious mineral deposit can be mined at a profit depends upon many factors.  Some but not all of these factors include: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; operating costs and capital expenditures required to start mining a deposit; the availability and cost of financing; the price of the gold or other mineral which is highly volatile and cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection.  We are also obligated to pay a royalty on certain of our mining activities, as explained below, which will make our ability to operate profitably more difficult.

We are a junior exploration company with limited operating mining activities and we may never increase our mining activities in the future.

Our business is exploring for copper, gold, silver, tungsten, and other precious minerals.  In the event that we discover commercially exploitable precious mineral deposits, we will not be able to make any money from mining activities unless the precious mineral deposits are actually mined, or we sell our interest.  Mining operations in the United States are subject to many different federal, state and local laws and regulations, including stringent environmental, health and safety laws.  In the event we increase operations on our mining properties, it is possible that we will be unable to comply with current or future laws and regulations, which can change at any time.  It is possible that changes to these laws will be adverse to any potential mining operations.  Moreover, compliance with such laws may cause substantial delays and require capital outlays in excess of those anticipated, adversely affecting any potential mining operations.  Our future mining operations, if any, may also be subject to liability for pollution or other environmental damage.  We are not currently insured against this risk because of high insurance costs.

We have a short operating history, have only lost money and may never achieve any meaningful revenue.

Our operating history consists of limited operations and starting our preliminary exploration activities.  We have limited income-producing activities from our exploration related activities.  We have already lost money due to the expenses we have incurred in acquiring the rights to explore on our property and starting our preliminary exploration activities.  Exploring for precious minerals or resources is an inherently speculative activity.  There is a possibility that we will not find any commercially exploitable deposits on our property.  Because we are an exploration company, we may never achieve any meaningful revenue.

The value of our property is subject to volatility in the price of gold and any other deposits we may seek or locate.

Our ability to obtain additional and continuing funding, and our profitability in the event we ever commence mining operations or sell our rights to mine, will be significantly affected by changes in the market price of copper, gold, silver, tungsten, and other mineral deposits.  These mineral prices fluctuate widely and are affected by numerous factors, all of which are beyond our control.  For example, the price of gold can be influenced by the sale or purchase of gold by central banks and financial institutions; interest rates; currency exchange rates; speculation; inflation or deflation; fluctuation in the value of the United States dollar and other currencies; global and regional supply and demand, including investment, industrial and jewelry demand; and the political and economic conditions of major gold producing countries throughout the world, such as Russia and South Africa.  The price of gold and other minerals have fluctuated widely in recent years, and a decline in the price of gold or other minerals could cause a significant decrease in the value of our property, limit our ability to raise money, and render continued exploration and development of our property impracticable.  If that happens, then we could lose our rights to our property and be compelled to sell some or all of these rights.  Additionally, the future development of our mining properties beyond the exploration stage is heavily dependent upon the level of metals prices remaining sufficiently high to make the development of our property economically viable.  An investor may lose its investment if the price of these minerals substantially decreases.  The greater the decrease in the price of gold or other minerals, the more likely it is that an investor will lose money.

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Our property title may be challenged. We are not insured against any challenges, impairments or defects to our mineral claims or property title.

Our property is comprised of patented and unpatented lode claims created and maintained in accordance with the federal General Mining Law of 1872.  Unpatented lode claims are unique U.S. property interests and are generally considered to be subject to greater title risk than other real property interests because the validity of unpatented lode claims is often uncertain.  This uncertainty arises, in part, out of the complex federal and state laws and regulations under the General Mining Law.  Until the claims are surveyed, the precise location of the boundaries of the claims may be in doubt and our claims subject to challenge.  If we discover mineralization that is close to the claims boundaries, it is possible that some or all of the mineralization may occur outside the boundaries.  In such a case we would not have the right to extract those minerals.  This uncertainty leaves us exposed to potential title suits.  Defending any challenges to our property title will be costly, and may divert funds that could otherwise be used for exploration activities and other purposes.  In addition, unpatented lode claims are always subject to possible challenges by third parties or contests by the federal government, which, if successful, may prevent us from exploiting our discovery of commercially extractable gold.  Challenges to our title may increase our costs of operation or limit our ability to explore on certain portions of our property.  We are not insured against challenges, impairments or defects to our property title, nor do we intend to carry title insurance in the future.

We may not be able to maintain the infrastructure necessary to conduct exploration activities.

Our exploration activities depend upon adequate infrastructure.  Reliable roads, bridges, power sources and water supply are important factors which affect capital and operating costs.  Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect our exploration activities and financial condition.

Our exploration activities may be adversely affected by the local climate, which prevents us from exploring our property year-round.

The local climate sometimes affects our exploration activities on our properties.  Earthquakes, heavy rains, snowstorms, and floods could result in serious damage to or the destruction of facilities, equipment or means of access to our property, or could occasionally prevent us temporarily from conducting exploration activities on our property.  Because of their rural location and the lack of developed infrastructure in the area, our mineral properties in Utah are occasionally impassible during the winter season. During this time, it may be difficult for us to access our property, make repairs, or otherwise conduct exploration activities on them.

Risks Relating to the Mining Industry

Exploring for precious metals is an inherently speculative business.  The properties on which we have the right to explore for precious minerals are not known to have any proven or probable reserves.  If we are unable to extract copper, gold, silver, tungsten, or any other resources which can be mined at a profit, our business could fail.

Natural resource exploration (currently our only business), and precious metal exploration in particular, is a business that by its nature is speculative.  There is a strong possibility that we will not discover copper, gold, silver, tungsten, or any other resources which can be mined or extracted at a profit.  Even if we do discover precious metal deposits, the deposits may not be of the quality or size necessary for us or a potential purchaser of the property to make a profit from actually mining it.  Few properties that are explored are ultimately developed into producing mines.  Unusual or unexpected geological formations, geological formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are just some of the many risks involved in mineral exploration programs and the subsequent development of gold deposits.  If we are unable to extract copper, gold, silver, tungsten, or any other resources which can be mined at a profit, our business could fail.

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Our business is subject to extensive environmental regulations which may make exploring or mining prohibitively expensive, and which may change at any time.

All of our operations are subject to extensive environmental regulations which can make exploration expensive or prohibit it altogether.  We may be subject to potential liabilities associated with the pollution of the environment and the disposal of waste products that may occur as the result of exploring and other related activities on our properties.  We may have to pay to remedy environmental pollution, which may reduce the amount of money that we have available to use for exploration.  This may adversely affect our financial position, which may cause loss of investor investment.  If we are unable to fully remedy an environmental problem, we might be required to suspend operations or to enter into interim compliance measures pending the completion of the required remedy.  If a decision is made to mine our properties our potential exposure for remediation may be significant, and this may have a material adverse effect upon our business and financial position.  All of our exploration and, if warranted, development activities may be subject to regulation under one or more local, state and federal environmental impact analyses and public review processes.  It is possible that future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could have significant impact on some portion of our business, which may require our business to be economically re-evaluated from time to time.  These risks include, but are not limited to, the risk that regulatory authorities may increase bonding requirements beyond our financial capability.  Inasmuch as posting of bonding in accordance with regulatory determinations is a condition to the right to operate under all material operating permits, increases in bonding requirements could prevent operations even if we are in full compliance with all substantive environmental laws.  We have been required to post substantial bonds under various laws relating to mining and the environment and may in the future be required to post further bonds to pursue additional activities.  We may be unable or unwilling to post such additional bonds which could prevent us from realizing any commercial mining success or commencing mining activities.

Possible amendments to the General Mining Law could make it more difficult or impossible for us to execute our business plan.

The United States Congress has considered proposals to amend the General Mining Law of 1872 that would have, among other things, permanently banned the sale of public land for mining.  The proposed amendment would have expanded the environmental regulations to which we are subject and would have given Indian tribes the ability to hinder or prohibit mining operations near tribal lands.  The proposed amendment would also have imposed a royalty of 4% of gross revenue on new mining operations located on federal public land, which would have applied to part of our property.  The proposed amendment would have made it more expensive or perhaps too expensive to recover any otherwise commercially exploitable gold deposits which we may find on our property.  While at this time the proposed amendment is no longer pending, this or similar changes to the law in the future could have a significant impact on our business or results of operations.

Market forces or unforeseen developments may prevent us from obtaining the supplies and equipment necessary to explore for mineral resources.

Precious metals exploration, and resource exploration in general, is a very competitive business.  Competitive demands for contractors and unforeseen shortages of supplies and/or equipment could result in the disruption of our planned exploration activities.  Current demand for exploration drilling services, equipment and supplies is robust and could result in suitable equipment and skilled manpower being unavailable at scheduled times for our exploration program.  Fuel prices are extremely volatile as well.  We will attempt to locate suitable equipment, materials, manpower and fuel if sufficient funds are available.  If we cannot find the equipment and supplies needed for our various exploration programs, we may have to suspend some or all of them until equipment, supplies, funds and/or skilled manpower become available.  Any such disruption in our activities may adversely affect our exploration activities and financial condition.

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Risks Relating to Our Organization and Common Stock

There is currently no market for our common stock and we cannot ensure that one will ever develop or be sustained.

There is currently no public market for our common stock.  There can be no assurance that there will be an active market for our shares of common stock either now or in the future.  If an active market is established, the market liquidity will be dependent on the perception of our operating business, among other things.  We will take certain steps including utilizing investor awareness campaigns, press releases, road shows and conferences to increase awareness of our business and any steps that we might take to bring us to the awareness of investors may require we compensate consultants with cash and/or stock.  There can be no assurance that there will be any awareness generated or the results of any efforts will result in any impact on our trading volume.  Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business and trading may be at an inflated price relative to the performance of our company due to, among other things, availability of sellers of our shares.  If a market should develop, the price may be highly volatile.  Because there may be a low price for our shares of common stock, many brokerage firms or clearing firms may not be willing to effect transactions in the securities or accept our shares for deposit in an account.  Even if an investor finds a broker willing to effect a transaction in the shares of our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price.  Further, many lending institutions will not permit the use of low priced shares of common stock as collateral for any loans.

Our principal shareholders, officers and directors own a substantial interest in our voting stock and investors will have a limited voice in our management.

Our principal shareholder, DMRJ Group, and their affiliates, as well as our officers and directors, in the aggregate beneficially own a majority of our outstanding common stock, including shares of common stock issuable upon exercise or conversion within 60 days of the date of this filing.  Additionally, the holdings of our officers and directors may increase in the future upon vesting or other maturation of exercise rights under any of the convertible securities they may hold or in the future be granted or if they otherwise acquire additional shares of our common stock.

As a result of their ownership and positions, our principal shareholders, directors and executive officers collectively are able to influence all matters requiring shareholder approval, including the following matters:

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election of our directors;

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amendment of our articles of incorporation or bylaws; and

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effecting or preventing a merger, sale of assets or other corporate transaction.

In addition, their stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company, which in turn could reduce our stock price or prevent our shareholders from realizing a premium over our stock price.

We are subject to the reporting requirements of federal securities laws, and compliance with such requirements can be expensive and may divert resources from other projects, thus impairing our ability to grow.

We are subject to the information and reporting requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and other federal securities laws, including compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Act Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).  The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the Securities and Exchange Commission and furnishing audited reports to stockholders will cause our expenses to be higher than they would have been if we were privately held.

It may be time consuming, difficult and costly for us to develop, implement and maintain the internal controls and reporting procedures required by the Sarbanes-Oxley Act and the Dodd-Frank Act.  We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.

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If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud.  Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud.  If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.  As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  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 any policies and procedures may deteriorate.

Public company compliance may make it more difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules implemented by the Securities and Exchange Commission have required changes in corporate governance practices of public companies.  As a public company, we expect these rules and regulations to increase our compliance costs in 2014 and beyond and to make certain activities more time consuming and costly.  As a public company, we also expect that these rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.  As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers, and to maintain insurance at reasonable rates, or at all.

Our stock price may be volatile.

If a market for our common stock is ever established, the market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

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our inability to maintain existing permits;

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changes in our industry;

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competitive pricing pressures;

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our ability to obtain working capital financing;

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additions or departures of key personnel;

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limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;

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our ability to execute our business plan; sales of our common stock;

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operating results that fall below expectations;

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loss of any strategic relationship;

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regulatory developments;

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economic and other external factors; and

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period-to-period fluctuations in our financial results; and inability to develop or acquire new or needed technology.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.  These market fluctuations may also materially and adversely affect the market price of our common stock.

We have not paid cash dividends in the past and do not expect to pay dividends in the future.  Any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future.  The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant.  In addition, as part of the Fourth Amendment to the Investment Agreement with DMRJ Group, beginning July 1, 2011, quarterly dividends in the amount of 10% of income are due to all preferred stockholders for each quarter that we have consolidated net income, and we also cannot pay any dividends on the common stock until the preferred dividends are paid.  As part of the Tenth Amendment to the Investment Agreement, effective February 19, 2014, this provision to pay dividends, based on income, to the preferred stockholders has been revoked.  If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

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Our common stock may be deemed a “penny stock,” which would make it more difficult for our investors to sell their shares.

Our common stock may be subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act.  The penny stock rules generally apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $4.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years).  These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances.  Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited.  If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities.  If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.

Exercise of options or warrants or conversion of convertible notes or preferred stock may have a dilutive effect on our common stock.

If the price per share of our common stock at the time of exercise of any options or warrants or conversion of any convertible notes, preferred stock, or any other convertible securities is in excess of the various exercise or conversion prices of such convertible securities, exercise or conversion of such convertible securities would have a dilutive effect on our common stock.  Further, any additional financing that we secure may require the granting of rights, preferences or privileges senior to those of our common stock and which result in additional dilution of the existing ownership interests of our common stockholders.

Our Articles of Incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock.  Our board of directors also has the authority to issue preferred stock without further stockholder approval.  As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.  In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

Gold Hill Projects

Overview

We hold leasehold interests within the Gold Hill Mining District in Tooele County, Utah, consisting of 247 unpatented mining claims, of which 246 are lode claims, and one is an unpatented mill site claim.  This includes 42 patented claims, and three Utah state mineral leases located on state trust lands, all covering approximately 25 square miles.  We have assembled all of our claims and leases in this district to create a sizeable, contiguous property package on which to conduct regional-scale exploration.  Therefore, we intend to maintain our leasehold interest in the remaining mining claims for future exploration, if warranted.  Over the next 12 months, we intend to commence extraction of mineralized material from the Kiewit lode claims and construct and operate a heap leach facility nearby to process the material from the Kiewit claims.  Production is targeted for fourth quarter 2014.

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The first phase of our activities has included the re-habilitation and redesign of the existing mills on the Cactus Mill site to create a pilot plant facility.  Originally, a smaller mill operated on this site for several decades.  A larger mill was built many years ago but required modification to accommodate the Yellow Hammer material.  The rebuilt pilot mill was completed and testing was done in fall of 2010, followed by limited production.  This activity was suspended in December 2011. The second phase of our current operating plan will include construction of an 800,000 square foot heap leach pad and process facility near the Kiewit site to accommodate disseminated gold material from the Kiewit project.  The construction of the heap leach facility and the proposed extraction activities on the Kiewit claims commenced in first quarter 2014.  We have no proven or probable reserves for this project.  Management has decided, rather than allocating funds and resources on a final feasibility study and developing proven or probable reserves, to process mineralized material based on existing data supplemented with our own confirming work.

We do not have any current plans to conduct material exploration activity on the remaining Utah claims until and unless we are able to generate revenue from planned activities on our Kiewit project claims.  At this time we do not consider these additional claims to be material to our current operating plan.

Project Location and Access

The Gold Hill Mining District is located in the Gold Hill and the Clifton 7½ minute quadrangles in western Utah.  The district includes the north end of the Deep Creek Mountains, one of the nearly north-south ranges that are common in the Great Basin.  On the east and north, the mountain area is separated by gravel slopes from the flat plain of the Great Salt Lake Desert, and on the west it is bounded by the Deep Creek Valley and groups of irregular low hills.  It is approximately 190 miles west-southwest of Salt Lake City, Utah, and approximately 56 miles south southeast of Wendover, Utah.  The project is reached by taking Alternate 93A south from Wendover approximately 28 miles and turning east on to the Ibapah Highway, a paved two lane road.  Approximately 17 miles east is a maintained two lane county road which provides access to the property approximately 11 miles southeast to the town of Gold Hill, Utah.  Each of the claims and the mill site are accessible by dirt roads maintained year-round by us and Tooele County.  Access to the property is maintained all year and we likewise intend to maintain roadways between the mining claims, the mill site and paved roads all year.

Mineral extraction activities on the property at this time will be open-pit with heap leach processing.  We anticipate conducting underground exploration in the future.

History

The Gold Hill area is one of the oldest mining districts in the State of Utah.  It reflects 43 known historical producing deposits mined primarily from the mid-1800s until the end of World War II.  These deposits included gold, silver, copper, bismuth, lead, zinc, tungsten, arsenic, molybdenum, cobalt, and beryllium.  Exploration and mining activities commenced in the mid-1800s as travel westward through the area to California was at its peak.  Lead mineralization first attracted the attention of travelers prompting early prospecting.  Placer gold was first discovered in the Gold Hill area in 1858.  These early prospectors were hampered by repeated attacks of local Native American tribes and the area was abandoned until 1869 when the settlements of Gold Hill and Clifton were reestablished.

A lead smelter was constructed at Clifton in 1872 and relocated to Gold Hill in 1874.  However, mining activity did not commence in earnest until 1892 when a mill and smelter were constructed at Gold Hill.  Substantial quantities of gold and silver ore were processed at this site between 1892 and 1896.  Mining activity gradually diminished until 1905 when exploration for copper revived the area.  With the outbreak of World War I and the completion of the Deep Creek Railroad between Gold Hill and Wendover, a new revival of interest in the area commenced.  Gold, silver, copper and lead were produced and approximately 3,000 residents lived in Gold Hill and Clifton at the time.

Tungsten was produced beginning in 1912.  Significant amounts of gold and bismuth were also reportedly extracted during this period.  Two mines produced tungsten in 1914 and 1917 and were operated primarily for the strategic requirement of tungsten during the two world wars.  Gold and silver mining ceased completely with the beginning of World War II since the few remaining miners focused their attention on the production of strategic metals such as arsenic and tungsten to support the war effort.

Arsenic was produced beginning with the outbreak of World War I and was used primarily for pesticides in the cotton fields of the south.  Two former copper producers also produced arsenic between 1923 and 1925.  One of the mines reopened during World War II to produce arsenic for the war effort.  None of the arsenic deposits previously mined are located on our claims.

The first large-scale geological study of the area was published in 1935 by T. B. Nolan as U.S. Geological Survey Professional Paper 177 and is referred to herein as the Nolan Report.  The Nolan Report provided the first detailed data on the mining district.

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The mining district remained largely dormant during the period after World War II through the mid-1970s.  Between this period and the mid-1990s, several mining companies began to consolidate the fragmented land holdings in the area and a more regional-scale exploration operation was conducted.  In 1993 Clifton Mining Company acquired several of the mining claims in the area and subsequently purchased Woodman Mining Company which also held claims in the district.  After purchase of the claims, Clifton Mining commenced additional exploration activities and in 1997 developed road access up the Clifton Hills area.  Clifton completed construction of a 50 ton per day mill at the Cactus Mill site and started construction of a 500 ton per day gravity-flotation mill at the same location.  In 1999 Clifton Mining borrowed funds which financed upgrades to the mill.

Between 1994 and 1997 Kennecott Utah Copper, now owned by Rio Tinto, explored a large region of the district.  In December 2002 Clifton Mining and Woodman Mining entered into an option-joint venture agreement with Dumont Nickel Inc., which in 2010 changed its name to DNI Metals Inc.  The joint venture ultimately covered approximately 10.3 square miles of mineral properties but did not include the Yellow Hammer claims which were controlled by the Moeller family.  In 2003 Dumont commenced exploring the properties with the objective of identifying bulk mineable gold, copper and silver targets through regional work as well as several drill programs.  Beginning in 2004 Dumont completed a regional-scale grid and reconnaissance rock and soil sampling exploration program with detailed, targeted exploration work over the Clifton Shears Corridor, the Kiewit Zone and the prior zone owned by Kennecott.  Ultimately, Dumont determined that the scale of the project was too small and decided to sell its interest in the project.  In July 2009 Dumont completed the sale of all its mineral properties in this area to Clifton Mining Company for $255,000 cash and a 0.5% net smelter return royalty against future production proceeds from the Cane Springs Property and from portions of the Kiewit project claims.  The joint venture and the option agreement were both dissolved and terminated.  

Climate and Vegetation

The Gold Hill area lies within the region of the interior drainage that includes western Utah and most of Nevada, and, like the remaining portions of that area, is a high desert semiarid climate.  The area is composed of a highly dissected group of hills of relatively low relief.  The elevation of Gold Hill village is 5,321 feet.  The Gold Hill area is bounded on the east by the Great Salt Lake Desert at an altitude of about 4,300 feet, on the north by Dutch Mountain with a higher elevation of 7,735 feet, on the west by Clifton Flat at an approximate elevation of 6,600 feet, and on the south by Montezuma Peak with an elevation of 7,369 feet.

Pronounced differences in temperatures between night and day are common, with the dryness of the air mitigating the high temperatures which predominate the summer days.  Annual precipitation averages approximately 12 inches with about half falling in the months from February to May.  Rainfall during summer to early fall is commonly in the form of severe thunderstorms.  Snow may be expected between October and May.  Fieldwork in the area is generally permitted throughout the year.

The higher portions of the Deep Creek Range and small areas near the summits of the adjoining mountains support a fairly heavy growth of yellow pine.  The lower slopes of these mountains have a sparse covering of juniper and piñon trees.  On the lower hills and on the gravel slopes surrounding them these trees give way to sagebrush.  The floor of the Great Salt Lake Desert in the north-east corner of the district is almost completely barren of vegetation.

Title to the Claims

There are significant differences between the ownership rights associated with patented mining claims and those associated with unpatented mining claims.  The granting of a patent is a relinquishment by the United States of its ownership of the land patented, and is the origin of private ownership of such land.  Thus, the owner of a patented mining claim has a fee simple title to the mining claim so patented.  The original locator and each subsequent owner of an unpatented mining claim, on the other hand, has only “possessory” title which is dependent upon maintaining possession and is subject to a paramount title of the United States.  A mining claim locator’s possessory right is established by the physical act of “location” of an unpatented mining claim for minerals such as gold and silver on un-appropriated public land that is open to mineral location, and remains valid so long as the unpatented mining claim is maintained in compliance with the Mining Law of 1872, as amended, and other federal and state laws and regulations.  Such laws and regulations require a mineral discovery, the making of the mining claim on the ground in a specific way, and the making of annual payments to the U.S. Department of the Interior, Bureau of Land Management, referred to herein as the BLM, in order to maintain the unpatented mining claim.  Because possessory title is dependent upon the factual basis of these requirements, a determination that appropriate documents have been recorded in the county in which the mining claim is located and filed with the BLM does not ensure valid possessory title.

A valid unpatented mining claim may be held indefinitely and the mineral deposit mined without obtaining a patent from the United States.  There is no requirement that royalties be paid to the United States for minerals produced from unpatented mining claims. However, proposals repeatedly have been introduced into Congress that would substantially modify the Mining Law of 1872 which could require, among other things, the payment of royalties to the United States.

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We believe that we hold valid leasehold interests in all of our Utah mining claims and state leases, in particular the patented Yellow Hammer claims, the seven unpatented lode mining claims known as the Kiewit claims, and the unpatented mill site on the Cactus Mill property.  Nevertheless, there may exist conflicting interests in these claims.  In 1996 Clifton Mining obtained possessory title to the Cactus Mill site under a quitclaim deed from American Consolidated Mining Co., which had previously quitclaimed the site to another entity which recorded the deed after Clifton Mining.  Because Utah has a race notice recording statute and the Clifton Mining deed was recorded first, management believes Clifton Mining holds valid possessory title to the site which has been leased to us.  In addition, a quitclaim deed recorded in 2009 from International Minerals & Metals Inc. and IMM-Dworkin Holdings, LLC to Clifton Mining references a royalty agreement granting a 0.5% royalty in favor of the grantors over a portion of the claims including the Kiewit claims.  No royalty deed has been recorded and management has been unable to locate the royalty deed.  Nevertheless, this royalty obligation may exist in favor of the original grantors.  Management does not believe that any of the exceptions to clear possessory title to the claims raises a material risk to planned operations and Clifton Mining has agreed to indemnify and hold us harmless from certain potential encumbrances.

Glossary

Archean: Of or belonging to the earlier of the two divisions of Precambrian time, from approximately 3.8 to 2.5 billion years ago, marked by an atmosphere with little free oxygen, the formation of the first rocks and oceans, and the development of unicellular life. Of or relating to the oldest known rocks, those of the Precambrian Eon, that are predominantly igneous in composition.

Assaying: Laboratory examination that determines the content or proportion of a specific metal (that is, gold) contained within a sample.  Technique usually involves firing/smelting.

Development: A development project is one which is undergoing preparation of an established commercially mineable deposit for its extraction, but which is not yet in production.  This stage occurs after completion of a feasibility study.

Dike: A tabular igneous intrusion that cuts across the bedding or foliation of the country rock.

Exploration: An exploration prospect is one which is not in either the development or production stage.

Fault: A break in the continuity of a body of rock.  It is accompanied by a movement on one side of the break or the other so that what were once parts of one continuous rock stratum or vein are now separated.  The amount of displacement of the parts may range from a few inches to thousands of feet.

Fold: A curve or bend of a planar structure such as rock strata, bedding planes, foliation, or cleavage.

Formation: A distinct layer of sedimentary rock of similar composition.

Geophysicist: One who studies the earth; in particular the physics of the solid earth, the atmosphere and the earth’s magnetosphere.

Granitic: Pertaining to or composed of granite.

Heap Leach: A mineral processing method involving the crushing and stacking of an ore on an impermeable liner upon which solutions are sprayed that dissolve metals such as gold and copper; the solutions containing the metals are then collected and treated to recover the metals.

Intrusions: Masses of igneous rock that, while molten, were forced into or between other rocks.

Mapped or Geological: The recording of geologic information such as the distribution and nature of rock.

Mapping: Units and the occurrence of structural features, mineral deposits, and fossil localities.

Mineral: A naturally formed chemical element or compound having a definite chemical composition and, usually, a characteristic crystal form.

Mineralization: A natural occurrence in rocks or soil of one or more metal yielding minerals.

Mineralized Material: The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.

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Mining: Mining is the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product.  Exploration continues during the mining process and, in many cases, mineral reserves are expanded during the life of the mine operations as the exploration potential of the deposit is realized.

Pipes: Vertical conduits.

Production Stage: A “production stage” project is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product.

Sedimentary: Formed by the deposition of sediment.

Shear: A form of strain resulting from stresses that cause or tend to cause contiguous parts of a body of rock to slide relatively to each other in a direction parallel to their plane of contact.

Vein: A thin, sheet-like crosscutting body of hydrothermal mineralization, principally quartz.

Geology

Our Gold Hill project is underlain by Carboniferous limestone and shale units of the Ochre Mountain Limestone, Manning Canyon, and Ochre Formations.  Two distinctly separate igneous plutons intrude the sediments: a Jurassic granodiorite in the north and an Oliglocene quartz-monzonite in the south.  Intense structural preparation is exhibited in different forms throughout the property with extensive primary north south fracturing exhibited in most areas.  Considerable east west fracturing exists in the center of the project area and appears to control and/or host mineral occurrences.  Generally, economic mineralization exhibits a close special relation to the Jurassic granodiorite with economic mineralization occurring both along the sediment contacts and the fractures within the intrusive.  Nevertheless, there are no proven or probable reserves which would substantiate an established commercially minable deposit for extraction.  The close, special relationship of the granodiorite to many of the mineral occurrences suggests it is the primary source of the mineralization.  The Nolan Report described several separate faulting, folding, and mineralizing events in the district.

The Kiewit occurrence has been characterized as a hydrothermal disseminated gold zone in a highly fractured granodiorite intrusion.  A specific horizon or low angle fault structure manifests itself as an anomalous gold blanket within the intrusion.

The Yellow Hammer mineralized material consists of several structurally controlled tabular and pipe-like copper, gold/silver, and tungsten zones hosted in the strongly altered quartz monzonite.  Copper oxides consist mostly of azurite, malachite and chrysocolla.  Sulfide copper minerals include chalcocite, chalcopyrite, covellite, and many other minerals including native copper.  Tungsten minerals are primarily sheelite.  Copper, gold, silver, and tungsten occur side by side within the shear zones.

Exploration Activities

Systematic exploration is ongoing at the Kiewit site on a limited basis.  In addition, several other prospects including Oquirrh Springs the Frankie, the Lucy L and the Rustler have previously been sampled and evaluated.  We do not have any current plans to conduct material exploration activities on the remaining Utah claims until and unless we are able to generate revenue from planned activities on our Kiewit project claims.

In the Kiewit area, based upon our calculation of mineralized material based on drill results from prior drilling performed by Dumont Nickel Inc. from 2004 to 2006 and recent metallurgical test work by McClellan Laboratories, we concluded that sufficient mineralized material was present to justify removing the material by open pit and processing it by leaching at a facility to be constructed near the Kiewit claims.  McClellan Laboratories completed a column leach test which resulted in 70% gold recovery on minus 1/8^th material and with modest reagent consumptions due to the nature of the deposit (granodiorite).

In 2011 we completed a 43-101 compliant resource calculation for the Kiewit deposit.  The report included historical resource estimates as well as a general project summary.

Mineralization in the project area is manifested as: contact-metasomatic in and around limestone-granodiorite contacts (skarns), as fissure quartz-carbonate-adularia veins within the intrusive body itself, and as copper-gold replacement deposits within both the limestone and the intrusion.  The report concluded that together these styles of mineralization are indicative of epithermal and related porphyry systems.  Underlying thrust faults such as the Ochre Mountain thrust fault and the North Pass thrust fault along with numerous Mesazoic cross-cutting low-angle faults would have allowed magmatic or hydrothermal fluids emanating from the intrusion to migrate far from the intrusion and deep into surrounding wall rock.  Clastic shale units within the property may have acted to form traps where migrating fluids would have deposited metals.

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We believe the structural, lithological, and geochemical signature of the Gold Hill area is favorable for a porphyry copper-gold system (and related skarns) proximal to the Jurassic granodiorite, and for sediment hosted gold deposits distal to the granodiorite intrusion.

Exploration Plans

We intend to commence development of processing activities on the Kiewit Claims in first quarter 2014.  Set forth below is a brief discussion of the material plans relating to these projects:

Kiewit Gold Claims.  Based on prior exploration work performed by Dumont Nickel between 2004 and 2006, management believes that mineralized material located on the Kiewit claims is a highly oxidized, highly fractured, highly disseminated and cyanide amenable hydrothermal gold deposit, with very minimal silver occurrences with the gold.  Independent metallurgical testing by McClelland Laboratories in Reno, Nevada, has shown recoveries of 70% of gold are achievable with very low reagent consumptions but with the need for very fine crushing. We intend to extract mineralized material from three open pit mines and to process the material using a cyanide heap leach operation to recover gold and small amounts of silver.  Mining, haulage operations, and placement of the material on the leach pad will be performed in-house and crushing is intended to be performed by outside contractors.  The claims are located approximately 3000 feet northeast of the proposed leaching facility.  Permitting for this project was received in January 2014 and the Reclamation bond was posted in February 2014.  Development of the heap leach pad and process facility is ongoing with production of gold expected in fourth quarter of 2014.

Kiewit Heap Leach Facility.  We intend to process any mineralized material extracted from the Kiewit claims through a heap leach facility we propose to construct approximately 3,000 feet to the southwest of the Kiewit claims on patented claims we currently lease.  We estimate that the leaching facility will cover approximately 20 acres.  The project will entail the construction of an 800,000 square foot clay and plastic lined pad and ponds and a 1,500 gallon per minute carbon column recovery facility.  We have budgeted $3,500,000 to complete this project which is expected to be complete in third quarter of 2014.

Cactus Mill Pilot Plant Rebuild.  The Cactus Mill site is located approximately 1/3 mile north and west of the town site of Gold Hill and approximately four miles north of the Yellow Hammer claims.  All needed access roads are already in place.  Milling began on this site in about 1919.  Prior to our recently completed rebuild project, the site consisted of two buildings with a concentrated storage area.  Water for the area comes from the Cane Springs, located approximately 1,000 feet southwest of the pilot mill site and is piped to the pilot mill.

The pilot plant is comprised of a copper flotation circuit followed by flotation and gravity circuit for tungsten.  After spending approximately $1,000,000 on the remodel and reconstruction of the pilot plant, we tested the facility during September 2010 and commenced processing mineralized material in October 2010 and continued operations until December 2011.

We have suspended Yellow Hammer operations and the processing of its’ mineralized material through the Cactus Mill.  

Permits

Utah regulations stipulate that, as long as any exploration projects on state lands are limited to an area within ten acres, there are no requirements to perform an extensive environmental assessment or compose a Plan of Operation.  Larger projects would require a Plan of Operation which would consist of a reclamation plan and bond.  The Bureau of Land Management (“BLM”) has shifted some of its land management and authority to state agencies, such as the Utah Division of Oil, Gas and Mining (“DOGM”) which regulates mining activities on state and private lands.  DOGM also shares authority with the BLM to stipulate and enforce environmental protection measures which are generally regulated by the Utah Department of Environmental Quality.  Our proposed exploration activities are located in the State of Utah and therefore require various filings with DOGM.  DOGM requires all large mining operations to have an approved notice of intention and an approved reclamation contract in place and a surety bond posted.  All small mining operations and exploration projects must have a complete notice of intention filed with the Division.  

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After retaining North American Exploration, Inc. of Kaysville, Utah and JBR Environmental Consultants, Inc. of Sandy, Utah to assist us we obtained the final permit necessary to commence construction and development for operations.  This permit was received in first quarter 2014 and the reclamation bond was posted in February 2014.  Development of the project has begun using funding provided by DMRJ Group.  The property is located in an historical mining district that has existing disturbances and mine wastes and is in a very arid, desolate area.  The property is also adjacent to, and uphill from, the Dugway Proving Grounds and Air Force Gunnery Range that is deemed an environmentally insensitive area, with low water quality.  Management believes that through our leased patented claims we have adequate private land for process facilities.  There is no material access from any metropolitan area or community.  Management believes that no previous work by any operator has been contested by regulators or others.  On March 20, 2013, the Confederated Tribes of the Goshute Reservation outlined in a letter to the BLM their review of the Kiewit Mine Project Draft Environmental Assessment. The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values and many other environmental resources.  On January 6, 2014 the permit was issued by the BLM and on February 6, 2014 the Tribes filed an appeal to the issuance of the permit.  The BLM has informed us of their intention to defend its case against the appeal.

Set forth below is a summary of the status of the permitting process for the various segments of the project:

Yellow Hammer Small Mining Operations Permit:  We hold a Small Mining Operations Permit from DOGM.  This permit was approved by the Division on October 5, 2009.  We have also posted a reclamation bond of $48,500 with the Division.  This Small Mining Operations Permit stipulates that as long as any exploration or mining operations are limited to an area within ten acres, there are no requirements to perform an extensive environmental assessment or complete a Plan of Operation.  This area will be absorbed into the Kiewit Large Mine Permit area and the Small Mining Operations Permit will no longer be valid.  The $48,500 bond will be returned to us.

Cactus Mill Site:  We currently hold a Large Mining Operations Permit from DOGM for the pilot plant which allows flotation and gravity concentration.  This permit was granted in October 1995 to Ivanhoe Joint Venture and was ultimately assigned to us on April 6, 2009.  We have also entered into a Reclamation Contract with the Division which was originally effective August 9, 2002, and transferred to us on April 6, 2010.  We have also posted a reclamation bond in the amount of $42,802 for this project with the Division.  Mineralized material for this pilot plant was generated exclusively from the Yellow Hammer claims under the above–referenced Small Mining Operations Permit.  Operations at this plant are currently suspended.

Cactus Mill Heap Leach Project:  The BLM and DOGM permitting processes have rendered the permit application too difficult to complete and, as such, our plans to amend the Cactus Mill permit to include a heap leach project have been put on hold.  

Kiewit Project:  This deposit exists entirely on BLM unpatented mining claims from which an environmental assessment was previously completed by Dumont Nickel, a predecessor operator, on the affected area.  The heap leach pad and process area will be located on patented mining claims approximately 3,000 feet to the southwest of the Kiewit claims.  

In February 2010 we filed an application with DOGM for a Large Mining Operations Permit to commence large mining operations for three open pit mines and a heap leach gold facility.  Final approval was received in November 2012.  In February 2010 we also submitted a Plan of Operation to the BLM.  Final approval was received in January 2014 and the approval is currently being appealed, as indicated above. A separate Groundwater Discharge Permit through the Utah Department of Environmental Quality was issued on December 7, 2010.

In addition to completing the notice of intent filing, the BLM requires an analysis of our Plan of Operation in compliance with the National Environmental Protection Act (“NEPA”).  JBR Environmental Consultants was engaged to prepare this analysis. The cost to prepare this analysis was $243,549.  Approval of the Environmental Assessment was issued in January 2014 and development of the project began in February 2014 after posting the Reclamation Bond.

Yellow Hammer Exploration:  In October 2008 DOGM issued an exploration permit for exploration of the Yellow Hammer claims which was used to conduct our drilling program on these claims in the fall of 2009.  We have also executed a Reclamation Contract dated October 13, 2009, and have posted a reclamation bond with the Division in the amount of $12,300 for this project.  This permit will also be absorbed into the Kiewit Large Mine Permit and the bond for the exploration permit will be returned to us.  Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.  Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on our planned operations and cause increases in capital expenditures or exploration costs or reduction in levels of mineralized material from future properties, if any, or require abandonment or delays in exploitation of new mining properties.

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Water and Power

Pursuant to our lease agreement with Clifton Mining, we have access to Cane Springs, a natural flowing spring approximately 1,000 feet southwest of the Cactus Mill site, as well as the Cane Springs mine shaft located approximately ¼ mile south of the Cactus Mill.  We have reconstructed pipe lines from Cane Springs and the Cane Springs shaft to the Cactus Mill pilot plant.  Management believes the water from these two sources will be sufficient to operate the pilot plant and the initial operations at the Kiewit heap leach, if needed.  We have been granted a one cubic foot per second water right from the Utah Division of Water Rights to provide water to the proposed Kiewit heap leach facility, which management believes will be sufficient to operate the proposed facility.  We intend to construct a well adjacent to the facility to provide this water.  Prior work on this site by Dumont Nickel has identified water at a depth of approximately 350 feet.

We believe that the generators installed with the pilot plant will be sufficient to provide the power necessary to operate the facility.  We have installed an 8,000 gallon diesel fuel tank which we estimate will permit running time of approximately five weeks before refilling is required.  We are also negotiating with a utility to provide a permanent power source by running power lines to the property for leaching facilities and pilot mill.  We believe that all necessary easements are in place for installation of the power lines and estimate that the cost to install the lines would be approximately $13,000.  We are also exploring additional alternatives for power to the property.

Offices and Other Facilities

We do not maintain separate offices for the Company.  Mr. Havenstrite, our President, operates from his office in Reno, Nevada and also works on site at our mining property in Tooele County, Utah.  Monthly rent for the office space in Reno is $500 and commenced October 1, 2009.  Financial and engineering activities are performed in this office and rent includes use of all business equipment needed to perform these functions.  This office space is used primarily for RMH Overhead, LLC and Overhead Door Co. of Sierra Nevada/Reno, Inc., businesses owned by him.  Agreements for the use of the office space facilities with these parties are month-to-month and can be cancelled at any time.  Because of limited cash resources, these rents accrued in 2013 rather than being paid.  Total accrued rent for office space in Reno, Nevada at December 31, 2013 is $7,500.  

We rent a core-logging facility located on the Tooele County airport grounds in Wendover, Utah.  The facility includes a separate core splitting and sawing room, field supply storage rooms and sufficient floor space for logging tables and racks to hold over 21,000 feet of HQ core boxes.  Monthly rent for this space is $350 and the rental arrangement is terminable at any time.

ITEM 3.  LEGAL PROCEEDINGS

Our company is not a party to any legal proceedings reportable pursuant to this item aside from the appeal by the Tribes, as discussed above.  We have been granted intervener status in the ongoing appeals process between the Tribes and the BLM as a method to have access to the information relating to that appeal.

ITEM 4.  MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95 to this annual report.

PART II

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

Market Information

There is currently no public market for our common stock and it is not currently quoted or traded on any established public trading market.

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Unregistered Sales of Securities

During the quarter ended December 31, 2013, we issued a total of 16,071 shares each to West C Street, LLC and Ibearhouse, LLC as the monthly payments of interest on their convertible notes.  A total of 128,568 shares were issued during 2013 as payment of 2013 interest on the convertible notes.  The shares were valued at $0.70 for payment of the interest.  In addition, 150,000 shares were issued each to West C Street, LLC and Ibearhouse, LLC as penalty shares as part of the extension of the due date of the notes to November 30, 2014.  These shares were valued at $1.00 per share.  These shares were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(5) and/or Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering.  Each of the note holders was an accredited investor as defined in Regulation D.  Each investor delivered appropriate investment representations with respect to these issuances and consented to the imposition of restrictive legends upon the stock certificates representing the shares.  Each investor represented that it had not entered into the transaction with us as a result of or subsequent to any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast on television or radio, or presented at any seminar or meeting.  Each investor was afforded the opportunity to ask questions of our management and to receive answers concerning the terms and conditions of the transaction.  No underwriting discounts or commissions were paid in connection with the stock issuance.

Holders

At March 31, 2014, we had 630 holders of our common stock.  The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.  We have appointed OTC Stock Transfer, Salt Lake City, Utah, to act as the transfer agent of our common stock.  We act as our own transfer agent for the Series A, A-1, and A-2 Preferred Stock.

Dividends

We have never declared or paid any cash dividends on our common stock.  We do not anticipate paying any cash dividends to stockholders of our common stock in the foreseeable future.  In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.

So long as we have any outstanding obligations to DMRJ Group under the provisions of our Investment Agreement, as per the Fourth Amendment to the Investment Agreement, we are prohibited from declaring or paying any dividends, except on our Series A-1 and A-2 Preferred Stock.  In addition, we are prohibited from declaring a dividend on our common stock if at the time any dividends on our Series A-1 and A-2 Preferred Stock are unpaid.

The holders of the Series A-1 and A-2 preferred shares were originally entitled to quarterly dividends equal to 10% of our consolidated net income for each quarter that we report net earnings, commencing with the quarter beginning July 1, 2011.  No dividends have been paid to date.  This provision for dividends for the preferred stockholders was eliminated with the Tenth Amendment to the Investment Agreement, dated February 19, 2014.

ITEM 6.  SELECTED FINANCIAL DATA

As a smaller reporting company, we have elected not to provide the information required by this item.

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

The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto as filed with this report.

Overview

We are a mineral exploration company with proposed projects located in the Gold Hill Mining District in Tooele County, Utah.  We are currently focused on exploration for our Kiewit claims and construction of a heap leach facility near these claims.  Concentrates from our test mill site have previously been processed at a smelter in Hayden, Arizona and a refinery in Buffalo, New York.  We are not currently processing mineralized material.

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We were originally incorporated in the State of Idaho on November 5, 1957.  For several years we bought and sold mining leases and claims, but in 1995 we ceased all principal business operations.  In 2008 we changed our corporate domicile from the State of Idaho to the State of Nevada.  In May 2009 we raised funds to recommence mining activities.  In July 2009 we entered into agreements to commence exploration activities on mining claims in the Gold Hill Mining District located in Tooele County, Utah.  We hold leasehold interests within the Gold Hill Mining District consisting of 247 unpatented mining claims, including an unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands, all covering approximately 25 square miles.  From these claims we have centered our exploration activities on the Yellow Hammer site, the Kiewit site, and the Rainbow Hill, Cane Springs, Lucy L, Oquirrh Springs, Rustler and Frankie sites.  

On July 14, 2010, we entered into an Investment Agreement with DMRJ Group I, LLC (“DMRJ Group”). According to the original terms of the agreement, DMRJ Group had committed to loan to us up to $6,500,000 pursuant to certain terms and conditions as evidenced by a promissory note, under which advances made to us were due not later than July 14, 2012. These loan advances could only be used by us to pay transaction fees and expenses incurred in connection with the loan transaction, to purchase certain mining equipment, and as working capital to advance our Yellow Hammer and Kiewit mining activities.  The maximum amounts allocable to the Yellow Hammer and Kiewit projects were $2,500,000 and $2,750,000, respectively, and were subject to meeting certain milestones on the projects.  Advances for operations on the Kiewit project are conditioned upon our ability to obtain and maintain all environmental and mining permits necessary to commence mining activities and the timely payment of the initial Yellow Hammer advances.  We received loan advances from DMRJ Group of $3,900,000 and $3,550,000 at December 31, 2013 and December 31, 2012, respectively.

Under the initial terms of the loan, each principal advance amount bears interest of 15% per annum from the date of borrowing.  We were required to prepay interest on any advance that would accrue during the first year following the advance, or a shorter period if the advance is less than one year prior to the maturity date of the promissory note.  This prepayment of interest was nonrefundable if we prepaid the advance or went into default.  In addition, at the time we repay or prepay the advance, we were required to pay an additional amount equal to 20% of the principal amount being repaid or prepaid (payment date interest).

In July 2010, in connection with this agreement, we issued 958,033 shares of Series A Preferred Stock to DMRJ Group at $.001 par value for $958 cash.  We recorded a discount to the loan proceeds in the amount of $669,664, which was valued based on the stock price of $.70 less the cash received for the preferred stock.

Loan advances made for the Yellow Hammer and Kiewit projects were subject to mandatory prepayments by us.  Yellow Hammer advances were originally to be repaid, together with prepayment interest and any outstanding monthly interest, commencing on or before the fifth business day of the month beginning February 2011 and each month thereafter through September 2011.  Kiewit advances were to be repaid, together with prepayment interest and any outstanding monthly interest, beginning month seven after the initial advance on this project through month twelve.  However, due to the delays caused by the lengthy permitting process, the repayment dates have been deferred due to waivers, forbearances, and amendments to the initial Investment Agreement as stated in the following paragraphs.

In connection with the DMRJ Group transaction, our two convertible note holders, each of whom had loaned $300,000 to the Company on November 18, 2009, agreed to subordinate their debt to DMRJ Group.  In consideration for their agreement to subordinate their loans, we reduced the conversion price of the loans from $1.50 to $0.70 per share.  All other material terms of the loans remain unchanged.

On February 25, 2011, we entered into a Second Amendment to Investment Agreement with DMRJ Group which amended the Investment Agreement, dated as of July 14, 2010, as amended by the First Amendment and Waiver dated as of November 8, 2010.  The Second Amendment allowed us to receive a term loan advance of up to $125,000.  This advance was made without satisfying the provisions requiring us to meet certain milestones in connection with its Kiewit properties and permitting us to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  The advance is not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.

On March 6, 2011, the Company entered into a Forbearance Agreement with DMRJ Group pursuant to which DMRJ Group agreed to forbear until April 6, 2011, from exercising its rights and remedies with respect to an event of default by virtue of our failure to make a mandatory prepayment as required under the Investment Agreement.  We failed to make the mandatory prepayment to DMRJ Group on March 7, 2011, as required in the Investment Agreement.  Pursuant to the Forbearance Agreement if we cured this prepayment default on or prior to April 6, 2011; no default interest would be due with respect to the period between the date of the prepayment default and April 6, 2011.

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On March 11, 2011, we entered into a Third Amendment to Investment Agreement with DMRJ Group.  This amendment allowed us to make a further request for term loan advances under the Investment Agreement of up to $500,000 without satisfying the provisions requiring us to meet certain milestones in connection with the Kiewit properties and permitting us to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  Two $125,000 term loan advances were received as part of this amendment. These advances are not deemed to be Kiewit Advances, which means that they are not subject to the mandatory prepayment requirements under the Investment Agreement.

We failed to make our mandatory prepayment of $1,011,616 to DMRJ Group on April 7, 2011, as required pursuant to the Investment Agreement with DMRJ Group, and thus entered into a Fourth Amendment.

On April 21, 2011, we entered into a Fourth Amendment to Investment Agreement with DMRJ Group.  This amendment allowed us to receive a term loan advance under the Investment Agreement of $625,000 without satisfying the provisions requiring us to meet certain milestones in connection with the Kiewit properties and permitting us to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  The advance is not deemed to be a Kiewit Advance, which means that it is not subject to the mandatory prepayment requirements under the Investment Agreement.  The amendment also eliminates the requirement of the Investment Agreement to make mandatory prepayments for the Yellow Hammer advances.

We have considered the impact of ASC 470-50 “Debt-Modifications and Extinguishments” on the accounting treatment of the Fourth Amendment. ASC 470-50 states that a transaction resulting in a significant change in the nature of a debt instrument should be accounted for as an extinguishment of debt. The difference between the reacquisition price and the net carrying amount of the extinguished debt should be recognized currently in income of the period of extinguishment. We have concluded that the amendment constituted a substantial modification. During the quarter ended June 30, 2011, we recognized a loss on extinguishment of the DMRJ note of $2,149,404 representing the difference between the fair value of the amended note, including consideration and fees, and the carrying value of the original note, including related unamortized discount.

On June 29, 2012 we entered into a Forbearance Agreement with DMRJ Group which extended the due date of the June 30, 2012 loan payment to September 30, 2012 in exchange for 80,000 shares of Series A-2 Preferred Stock.  Pursuant to our Investment Agreement with DMRJ Group, on June 30, 2012, we were obligated to repay $1,550,000 of the funds previously loaned to us by DMRJ Group.  Pursuant to the Forbearance Agreement DMRJ Group agreed to forbear from exercising its rights relating to a payment default if the payment due on June 30, 2012 was not paid.  We failed to make the payment on June 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Because the terms of the forbearance agreement were not met, it was terminated on July 31, 2012.

We failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Under the Investment Agreement, DMRJ Group had the right at its option to notify us and declare the full amount of all of the loans immediately due and payable, foreclose on the security for the loans, or exercise any other legal rights based upon breach of the agreement.  DMRJ Group did not notify us of its intent to exercise any of its rights based upon default of us under the agreement.

On October 17, 2012, we entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provided for us to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.  Only one of these $50,000 advances was taken in 2012.  The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ was moved from December 31, 2012 to December 15, 2012.  The amount due under the Fifth Amendment for the prior balance due was $5,865,492 as of October 17, 2012; plus the $50,000 October Term Loan advance and accrued interest on the entire amount at 2% per month. This amount was not paid on December 15, 2012 and remained unpaid at December 31, 2012 with a total principal and accrued interest due in the amount of $6,214,098.  

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On January 29, 2013, we entered into a Sixth Amendment with DMRJ Group.  The Sixth Amendment provides for us to receive additional funds in one advance (January Term Loan Advance) of $50,000. This advance replaces the second October Term Loan Advance, which had never been drawn.  The advance is not deemed to be a Kiewit Advance, which means that it will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ was moved from December 15, 2012 to March 5, 2013.  The amount due under the Sixth Amendment is $6,328,506 as of January 29, 2013; plus the January Term Loan Advance, received February 7, 2012, and accrued interest on the entire balance at 2% per month, for a total due at March 5, 2013 of $6,525,643.  Negotiations regarding a future long-term business relationship to fund the DMRJ Group note and provide equity for operating capital are currently ongoing.  A proposed agreement has been tentatively approved providing for payment of this debt from mining revenues.  The formalization of the proposed agreement is contingent upon receipt of all necessary permits, which is projected to occur in 2013.  The inability to gain all necessary permits could result in a loss of the mining claims due to foreclosure by DMRJ Group.  If we lose our mining leases and other assets to DMRJ Group in foreclosure, we will not be able to continue our business operations as currently planned and any shareholder would lose their entire investment in our common stock.

On April 30, 2013, we agreed to the terms of a Seventh Amendment to the Investment Agreement with DMRJ Group.  This Amendment became effective on June 26, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from March 5, 2013 to June 30, 2013.  The Seventh Amendment provides for us to receive additional funds in two advances of $50,000.  The first advance, the “April Term Loan Advance”, was received on May 2, 2013 and the second advance, the “May Term Loan Advance” was received on June 26, 2013.  The June 30, 2013 payment was not made.  

On July 24, 2013, we agreed to the terms of an Eighth Amendment to the Investment Agreement with DMRJ Group.  This Amendment became effective on July 24, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from June 30, 2013 to September 30, 2013.  The Eighth Amendment provided for us to receive additional funds in two advances.  The first advance, the “July Term Loan Advance”, in the amount of $100,000, was received on July 24, 2013 and the second advance, the “Additional July Term Loan Advance” was received on August 23, 2013 in the amount of $50,000.  

The September 30, 2013 payment was not made and a Ninth Amendment to the Investment Agreement was entered into on October 24, 2013.  As a provision of this amendment the maturity date of the entire loan balance due to DMRJ Group was moved from September 30, 2013 to January 31, 2014.  The Ninth Amendment provided for the Company to receive additional funds in four advances of $25,000 each. The advances, designated the “October 2013 Term Loan Advances” are to be used for ordinary course general corporate purposes. The advances could be drawn for four successive calendar months commencing in October 2013 in the aggregate principal amount of $25,000 each for an aggregate of up to $100,000.  The interest rate on these advances remains at 2% per month. Two of these advances were drawn in 2013, with a third draw taken in January 2014.  The January 31, 2014 loan payment was not made.

On February 19, 2014, we agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group.  The Tenth Amendment provides for funding of mining operations through a series of Monthly Term Loan Advances totaling a maximum of $5,700,000 over four months.  As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016.  The interest rate on the loan balance was reduced from 24% to 15% and minimum payment amounts were established beginning in February 2015.  On the last business day of each month, commencing October 31, 2014, we shall pay to the Investor an amount equal to 100% of all cash flows from operations for the immediately preceding month, if any, less mutually agreed upon capital expenditures (and if an agreement on capital expenditures is not reached, then 100% of cash flows from operations) subject to a minimum cash balance of $200,000 until such time as the unpaid principal amount of all Term Loan Advances outstanding and all accrued interest has been paid in full.  All payments will be applied first to accrued but unpaid interest and second to outstanding principal.  The first Monthly Term Loan, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit.  Onsite development of the project has since begun. If the Company is unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate our mining leases and other assets.  

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A summary of DMRJ Group-related amounts is as follows:

	December 31,			December 31,
	2013			2012
Note Payable – DMRJ Group
Yellow Hammer, total per 4th Amendment		4,941,177			4,941,177
Accrued interest capitalized with 5th amendment		885,521			885,521
October 2012 term loan advance		50,000			50,000
2013 Loan Advances and Adjustments		387,794			0
Total loan balance at December 31	$	6,264,492		$	5,876,698
Accrued interest on DMRJ loans	$	1,781,027		$	337,400

Results of Operations for the Years Ended December 31, 2013 and 2012

During the years ended December 31, 2013 and 2012, we had net losses of $2,759,534 and $3,278,362, respectively.  This represents a decreased net loss of $518,828 for the year ended December 31, 2013.  The decrease in net loss for the year ended December 31, 2013 is generally attributable to a decrease in operating expenses and to the recognition of a loss on extinguishment of debt in 2012 in the amount of $920,000, compared to $0 in 2013, and due to the further restructuring of the DMRJ debt.  The loss on extinguishment represents the difference between the fair value of the amended note with DMRJ and the carrying value of the original note.  Offsetting these decreases is an increase in interest costs for the year ended December 31, 2013.

Liquidity and Cash Flow

Net cash used by operating activities was $344,035 during the year ended December 31, 2013, compared with $623,998 during the year ended December 31, 2012.  The decrease in cash used by operating activities is primarily attributable to the reduction in net loss for the year.

Net cash used by investing activities was $9,742 during the year ended December 31, 2013, compared to cash provided by investing operations of $21,058 during the year ended December 31, 2012.  The increase in cash used by investing is attributable to purchase of fixed assets during the year ended December 31, 2013 compared to the sale of assets in 2012.

Net cash provided by financing activities was $350,000 during the year ended December 31, 2013, compared with $200,150 during the year ended December 31, 2012.  The increase is primarily a result of increased borrowing from DMRJ Group, along with a reduction in equity financing.

As a result, cash decreased by $3,777 during the year ended December 31, 2013, leaving us a cash balance of $8,523 as of December 31, 2013, as compared to an ending cash balance of $12,300 as of December 31, 2012.

Under the terms of the Ninth Amendment to the Investment Agreement with DMRJ Group, repayment of all loan advances is due in full January 31, 2014.  This payment was not made and on February 19, 2014 the Tenth Amendment to the Investment Agreement was agreed upon.  This Tenth Amendment provides for repayment of the debt through operations with a series of required minimum payments beginning February 2015.  Effective October 31, 2014, all working cash flow from operations, subject to a minimum balance of $200,000, is due to DMRJ Group at the end of each month, for each previous month.  If we lose our mining leases and other assets to DMRJ Group in foreclosure, we would not be able to continue our business operations as currently planned and an investor would lose its entire investment in our common stock.

Critical Accounting Policies

The selection and application of accounting policies is an important process that has developed as our business activities have evolved and as the accounting rules have changed.  Accounting rules generally do not involve a selection among alternatives, but involve an implementation and interpretation of existing rules, and the use of judgment, to the specific set of circumstances existing in our business.  Discussed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported.  See Note 2, “Summary of Significant Accounting Policies,” in our attached audited consolidated financial statements for a discussion of those policies.

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Mineral Exploration and Development Costs

We account for mineral exploration costs in accordance with ASC 932 Extractive Activities.  All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.  Expenditures to explore 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.

Mineral Properties

We account for mineral properties in accordance with ASC 930 Extractive Activities-Mining.  Costs of acquiring mineral properties are capitalized by project area upon purchase of the associated claims.  Mineral properties are periodically assessed for impairment of value and any diminution in value.

Revenue

As an exploration stage company, our revenue from operations is referred to as income earned during the exploration stage.  Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured.  Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts.

Reclamation and Remediation

Remediation, reclamation and mine closure costs are based principally on legal and regulatory requirements.  Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties.  We use assumptions about future costs, capital costs and reclamation costs.  Such assumptions are based on our current mining plan and the best available information for making such estimates.  In calculating the present value of the asset retirement obligation we used a credit adjusted risk free interest rate of 10% and projected mine lives of 5 to 12 years, depending on the site.  On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions.  At December 31, 2013 and 2012, an Asset Retirement Obligation has been recorded in the amount of $69,920 and $63,584 respectively, for all of our Gold Hill properties.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, result of operations, liquidity, capital expenditures or capital resources.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

We have provided the financial statements required by this item immediately following the signature page of this report.

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

No disagreement or reportable event requiring disclosure under this item has occurred.

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ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Rick Havenstrite, our principal executive officer and Marianne Havenstrite, our principal financial officer as of the year ended December 31, 2013, conducted an evaluation, as of the end of the period covered by this report, of whether our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were (1) effective to ensure that information required to be disclosed by us in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and (2) designed to ensure that information required to be disclosed by us in such reports is accumulated, organized and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  Based upon this evaluation, Mr. and Mrs. Havenstrite concluded that, as of December 31, 2013, our disclosure controls and procedures were effective.

Management's annual report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and (iii) 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.

Management assessed our internal control over financial reporting as of December 31, 2013, the end of our fiscal year.  Management based its assessment on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992).  Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

Based on our assessment, management has concluded that our internal control over financial reporting was effective, as of the end of the fiscal year, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) that occurred during our most recent quarter ended December 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION

During the year ended December 31, 2013, no information was required to be disclosed in a report on Form 8-K that was not reported during the period.

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PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Current Management

The following table sets forth as of March 31, 2014 the names and ages of, and position or positions held by, our executive officers and directors, the employment background of these persons, and any directorships held by the current directors during the last five years.  The Board believes that all the directors named below are highly qualified and have the skills and experience required for effective service on the Board.  The directors’ individual biographies below contain information about their experience, qualifications and skills that led the Board to nominate them.

Name		Age		Positions		Director Since		Employment Background
Rick Havenstrite		55		Director & President		2009		Mr. Havenstrite has served as our President since April 2009 and has been employed by us to manage our mining operations since August 2009.  Since May 1999 he has been the co-owner and president of Overhead Door Company of Sierra/Nevada, Inc., a commercial and residential door installation company and since 2004 has been a partner in RMH Overhead, LLC.  From 1998 until 1999 he was employed by Nevada Star Resources, a small copper mining company, as manager of the Nevada Star Milford Copper Project in Utah; from 1996 until 1998 he was employed by Centurion Mines Corp, a exploration mining company, as vice-president of operations on the Milford Copper Project; from 1992 until 1996 he was general manager of Nevada operations for Arimetco Mining Yerington Nevada, a mid-size copper mining company; from 1991 until 1992 he was employed by Nevmont Minerals, a small gold mining company, as manager of the Golden Assets Mine in Montana; from 1983 to 1990 he was employed by Silver King Mines, which subsequently changed its name to Alta Gold Corp., a mid-sized diversified mining company, as the mine manager and superintendent on the Alta Gold Buckskin Mine and the Robinson Mine in Utah; and from 1980 until 1983 he was employed by Utah International, a large diversified mining company, as mine engineer of the Springer Tungsten Mine in Nevada and the Navajo Coal mine in New Mexico.  Mr. Havenstrite graduated in 1980 with a Bachelor of Science degree in mining engineering from the University of Reno Mackay School of Mines.  He is a registered Professional Mining Engineer with the State of Utah and is an inactive Professional Mining Engineer in the State of Nevada.
Daniel Small		44		Director		2011		Mr. Small has been a Managing Director of Platinum Management (NY) LLC, the advisor to Platinum Partners Value Arbitrage Fund LP, a multi-strategy investment fund since 2007.  Prior thereto he was a Senior Analyst at Glenview Capital Management, a long short-equity hedge fund from 2004 to 2007.  Mr. Small was a Director in the Strategic Risk Group, a proprietary investment platform at Merrill Lynch from 2003 to 2004.  Mr. Small was a Senior Analyst at Troubh Partners, a long short-equity hedge fund from 2000 to 2002.  He graduated magna cum laude with a B.S.E. from the Wharton School and received a J.D. from the University of Pennsylvania Law School.  Mr. Small has served as a director of our company since May 2011.  He has also served on the board of Black Elk Energy Offshore Operations LLC since 2009.
David Levy		29		Director		2011		Mr. Levy was appointed to our Board of Directors in May, 2011.  He is a member of the private placement group at the investment advising firm of Platinum Management (NY) LLC, where he has participated in over 25 capital raising transactions for public and private corporations.  He specializes in structuring and negotiating financings at all levels of the capital structure through extensive industry research financial analysis and modeling.  Mr. Levy graduated with honors from Sy Syms School of Business of Yeshiva University.

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Each director is elected until the next annual meeting of shareholders and until his successor is elected and qualified, except as otherwise provided in the Bylaws or required by law.  We did not hold an annual meeting of the shareholders for the fiscal year ended December 31, 2013, and we have not scheduled an annual meeting for the current year. Whenever the authorized number of directors is increased between annual meetings of the stockholders, a majority of the directors then in office has the power to elect such new directors for the balance of a term and until their successors are elected and qualified.  There are no family relationships between any director, executive officer, or person nominated or chosen by us to become a director, other than the relationship between our President, Rick Havenstrite, and our Treasurer/Principal Financial Officer, Marianne Havenstrite, who are married.

Officers are to be elected by the Board of Directors at its first meeting after every annual meeting of stockholders.  Each officer holds his office until his successor is elected and qualified or until his earlier resignation or removal.

Involvement in Certain Legal Proceedings

During the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of our directors or executive officers.

We are not aware of any legal proceedings in which any director, officer or affiliate of our company, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, or affiliate of our company, or security holder is a party adverse to us or our subsidiary or has a material interest adverse to us or our subsidiary.

Committees

Because of its small size, the Board carries out the duties of the committees.  We do not have compensation, audit, nominating, or other standing committees of the Board of Directors.

Nominating Procedures

Recommendations for candidates to stand for election as directors are made by the Board of Directors.  We have not adopted a policy which permits security holders to recommend candidates for election as directors or a process for stockholders to send communications to the Board of Directors.  There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

Code of Ethics

On March 21, 2011, we adopted a Code of Ethics which applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as well as to other employees or contractors and anyone associated with our company.

ITEM 11.  EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth information concerning the annual compensation awarded to, earned by, or paid to the named executive officers for all services rendered in all capacities to our company and its subsidiaries for the years ended December 31, 2013 and 2012:

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SUMMARY COMPENSATION TABLE

Name & Principal Position		Year		Salary and Fees $		Stock Awards $		All Other Compensation $		Total $
Robert E. Jorgensen, former CEO (1)		2013		57,000(2)		150,000(3)		-		207,000
		2012		121,154(2)		-		6,000(4)		127,154
Rick Havenstrite, President and CEO		2013		120,000		-		10,200(5)		130,200
		2012		120,769		-		10,200(5)		130,969

⁽¹⁾

On June 24, 2013, Mr. Jorgensen was no longer Chief Executive Officer and Principal Executive Officer of the Company and Mr. Havenstrite became Principal Executive Officer of the Company.

⁽²⁾

The amount reflected as accrued salary in 2013 for Mr. Jorgensen is the amount necessary to properly reflect the amount owed to him in full as part of a termination agreement which allows for Mr. Jorgensen to be paid in installments upon funding of the Kiewit project.

⁽³⁾

This amount is computed on the basis of the fair value computed in accordance with FASB ASC Topic 718.

⁽⁴⁾

Mr. Jorgensen received or accrued $6,000 in 2012 as rent paid by us for office space in his home which we used for our principal executive office.  This space was provided at a cost of $500 per month commencing October 1, 2010, pursuant to a Rental Agreement dated effective October 1, 2010, between us and Mr. Jorgensen.  Effective September 2012, this amount has accrued rather than being paid.  The rental agreement terminated effective December 31, 2012.

⁽⁵⁾

Mr. Havenstrite received $6,000 in 2013 and 2012 (paid to RMH Overhead, a company owned by Mr. Havenstrite), as rent paid by us for office space in Reno, Nevada.  We also paid $4,200 in 2013 and 2012 to RMH Overhead, for rent on an automobile.  Effective October 2012 these amounts have accrued rather than being paid.  The total accrued rent for auto and office space at December 31, 2013 for Mr. Havenstrite is $12,750.

During 2013 and 2012 we paid Mr. Jorgensen $10,000 per month in accordance with the terms of his employment agreement.  Beginning in June 2012, this amount was accrued rather than paid.  During 2013 we entered into a termination agreement with Mr. Jorgensen which authorized the issuance of 150,000 shares of common stock, issued on June 24, 2013 and allows for a termination payment which will be paid in monthly installments upon funding of the Kiewit project.

During 2013 and 2012 we paid Mr. Havenstrite $10,000 per month. Beginning in June 2012, this amount was accrued rather than paid.  At December 31, 2013, accrued wages payable to Mr. Havenstrite are $190,000.  In September 2010 we entered into an employment agreement with Mr. Havenstrite as President of our company.  The term of the agreement is for four years, expiring December 31, 2013, with automatic one-year extensions unless notice is given by either party.  Mr. Havenstrite is required under the terms of the agreement to devote a minimum of 75% of his business time to the affairs of our company.  Nevertheless, he may serve on the board of directors or serve as an officer of up to three companies not engaged in business which may reasonably compete with our business, provided that he would not be required to render any material services with respect to the operations or affairs of any other business which would exceed 25% of his entire business time.  In spite of the minimum percentage of his time required in his employment agreement, Mr. Havenstrite currently devotes approximately 90% of his time, or approximately 50 hours per week, to our business and approximately 10%, or 5 hours per week, of his business time to Overhead Door Company of Sierra/Nevada, Inc., his overhead door business in Reno, Nevada.  He does not anticipate devoting more than 20% of his time to the business of his overhead door company during the term of his employment contract with us.  The annual base salary is $120,000 plus performance compensation of between 10% and 100% of the annual base salary based upon fulfillment of annual performance goals established by the Board or the Compensation Committee.  In the event we terminate the agreement without cause or if the agreement is constructively terminated by us, we have agreed to pay Mr. Havenstrite a severance package equal to three times the initial base salary if such termination occurs on or before August 31, 2011, and one and one-half times the largest annual base salary plus the largest annual performance compensation received by Mr. Havenstrite under the Agreement if such termination occurs after August 31, 2011, payable 75% within 30 days and the balance within 30 days of the first anniversary of the termination.

Equity Awards

As of December 31, 2013, there were no unexercised options, stock that had not vested, or equity incentive plan awards for the named executive officers.

In July 2008 the Board of Directors adopted the Stock Option/Stock Issuance Plan, which was approved by the shareholders in August 2008 and amended in February 2010 and March 2014.  The purpose of the plan is to provide eligible persons an opportunity to acquire a proprietary interest in our company and as an incentive to remain in our service.

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There are 4,256,733 shares of our common stock authorized for non-statutory and incentive stock options and stock grants under the plan, which are subject to adjustment in the event of stock splits, stock dividends, and other situations.

The plan is administered by the Board of Directors.  The persons eligible to participate in the plan are as follows: (a) employees of our company and its subsidiary; (b) non-employee members of the board or non-employee members of the Board of Directors of any of its subsidiaries; and (c) consultants and other independent advisors who provide services to us or our subsidiary.  Options may be granted, or shares issued, only to consultants or advisors who are natural persons and who provide bona fide services to us or our subsidiary, provided that the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for our securities.

The plan will continue in effect until all of the stock available for grant or issuance has been acquired through exercise of options or grants of shares, or until July 12, 2018, whichever is earlier.  The plan may also be terminated in the event of certain corporate transactions such as a merger or consolidation or the sale, transfer or other disposition of all or substantially all of our assets.

Compensation of Directors

The following table sets forth certain information concerning the compensation of our directors, excluding the named executive officers whose total compensation is set forth in the Summary Compensation Table above, for the last fiscal year ended December 31, 2013:

DIRECTOR COMPENSATION

Name & Principal Position		Year		Salary and Fees $		Total $
Eric Moe, former Director(1)		2013		10,000(2)		10,000
Daniel Small, Director		2013		-		-
David Levy, Director		2013		-		-

⁽¹⁾

Mr. Moe resigned as a director on February 19, 2014.

⁽²⁾

Consulting fees due to Mr. Moe paid to Mr. Moe through June 2012 and accrued at $10,000 per month for the months July 2012-January 2013. Unpaid fees in the amount of $70,000 are accrued and reflected in accounts payable.  Mr. Moe has agreed to be paid amounts accrued to him in installments upon funding of the Kiewit project.

During 2013, we paid Mr. Moe $10,000 per month in accordance with the terms of his consulting agreement.  Beginning in July 2012, this amount was accrued rather than paid.  At December 31, 2013 we owed Mr. Moe $70,000 for consulting work.  This amount is reflected in our accounts payable.  As per the terms of his termination agreement, Mr. Moe is to receive monthly installments upon funding of the Kiewit project, until paid in full.

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

The following table sets forth certain information furnished by current management and others, concerning the ownership of our common stock as of March 31, 2014, of (i) each person who is known to us to be the beneficial owner of more than 5 percent of our common stock, without regard to any limitations on conversion or exercise of convertible securities or warrants; (ii) all directors and named executive officers; and (iii) our directors, named executive officers, and executive officers as a group:

Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership(1)		Percent of Class(1)
Robert E. Jorgensen 7115 North Division Street, Suite B #351 Spokane, WA 99208		683,250		7.19%
Rick Havenstrite 1290 Holcomb Ave. Reno, NV 89502		1,025,000(2)		10.79%
Daniel Small Carnegie Hall Tower 152 West 57th Street New York, NY 10022		27,718,333(3)		74.47%
David Levy Carnegie Hall Tower 152 West 57th Street New York, NY 10022		-		-
Executive Officers and Directors as a Group (4 Persons)		29,426,583		79.06%
Clifton Mining Company(4) 80 West Canyon Crest Road Alpine, UT  84004		560,824		5.90%
West C Street, LLC(5) Richard Meadows 21838 NE 102nd Street Redmond, WA 98053		1,208,210		12.72%
Ibearhouse, LLC(6) Kelley Price 7806 NE 10th Street Medina, WA 98039		1,208,210		12.72%
DMRJ GROUP I, LLC(3) Carnegie Hall Tower 152 West 57th Street New York, NY 10022		27,718,333(3)		74.47%

⁽¹⁾

This table is based upon information supplied by officers, directors and principal stockholders and is believed to be accurate.  Unless otherwise indicated in the footnotes to this table, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.  Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.  Shares of our common stock subject to options, warrants, or other conversion privileges currently exercisable or convertible, or exercisable or convertible within 60 days of March 31, 2014, are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.  Where more than one person has a beneficial ownership interest in the same shares, the sharing of beneficial ownership of these shares is designated in the footnotes to this table.  At March 31, 2014, we had 9,501,683 shares outstanding.

⁽²⁾

Includes 25,000 shares held by Mr. Havenstrite’s wife, Marianne Havenstrite.

⁽³⁾

Consists of 958,033 shares of Series A Preferred Stock convertible into 958,033 shares of the Company’s common stock, 180,000 shares of Series A-2 Preferred stock convertible into 1,800,000 shares of the Company’s common stock, and 249,603 shares of Series B Preferred Stock convertible into 24,960,300 shares of the Company’s common stock. Mr. Small shares beneficial ownership of these shares with DMRJ Group.

⁽⁴⁾

Kenneth Friedman has sole voting and investment power over these shares.

⁽⁵⁾

Richard Meadows has sole voting and investment power over these shares.

⁽⁶⁾

Kelley Price has sole voting and investment power over these shares.

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Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth as of the fiscal year ended December 31, 2013, certain information with respect to compensation plans (including individual compensation arrangements) under which our common stock is authorized for issuance:

		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) and (b)) (c)
Equity compensation plans approved by security holders(1)		-0-		--		1,880,333
Equity compensation plans not approved by security holders		-0-		--		-0-
Total		-0-		-0-		1,880,333

⁽¹⁾

Represents remaining shares issuable under our 2008 Stock Option/Stock Issuance Plan.

In July 2008 the Board of Directors adopted the Stock Option/Stock Issuance Plan, which was approved by the shareholders in August 2008 and amended in February 2010 and March 2014.  The purpose of the plan is to provide eligible persons an opportunity to acquire a proprietary interest in our company and as an incentive to remain in our service.

In February 2010 and March 2014, we amended the plan to increase the number of shares available from 1,250,000 to 3,000,000 and from 3,000,000 to 4,256,733 shares of our common stock, respectively, which are authorized for non-statutory and incentive stock options and stock grants under the plan, which are subject to adjustment in the event of further stock splits, stock dividends, and other situations.  So long as we have any outstanding obligations to DMRJ Group, we are restricted to granting options or issuing shares under the plan in excess of 1,100,000 shares.  Under this incentive plan, we have issued 1,119,667 shares as of March 31, 2014.

The plan is administered by the Board of Directors.  The persons eligible to participate in the plan are as follows: (a) employees of our company and any of its subsidiaries; (b) non-employee members of the board or non-employee members of the Board of Directors of any of its subsidiaries; and (c) consultants and other independent advisors who provide services to us or our subsidiary.  Options may be granted, or shares issued, only to consultants or advisors who are natural persons and who provide bona fide services to us or one of our subsidiaries, provided that the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for our securities.

The plan will continue in effect until all of the stock available for grant or issuance has been acquired through exercise of options or grants of shares, or until July 12, 2018, whichever is earlier.  The plan may also be terminated in the event of certain corporate transactions such as a merger or consolidation or the sale, transfer or other disposition of all or substantially all of our assets.

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

Certain Relationships and Related Transactions

On November 30, 2013, under the Amended and Restated 15% Convertible Promissory Notes entered into on July 14, 2012 (the “Notes”), as corrected, between our company and West C. Street LLC and Ibearhouse, LLC (the “Note Holders”), the Notes were scheduled to mature and our company would have been required to pay each of the Note Holders the principal amount of $300,000.

Our company was unable to pay the required payments.

On December 3, 2013 and December 31, 2013, our company and the Note Holders entered into amendments to the Notes which extended the maturity date to November 30, 2014, authorized the issuance of 150,000 shares of our common stock to each of the Note Holders, and authorized the continued payment of quarterly share payments in lieu of interest to each of the Note Holders until the new maturity date.

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On June 18, 2013, we entered into an agreement with Eric Moe, one of our directors, to terminate the consulting agreement dated September 1, 2010, as amended on May 3, 2011, between him and our company.  Under the terms of the termination agreement, we have agreed to pay Mr. Moe a severance fee of $70,000 at the rate of $5,000 per month beginning with the first month following the date on which we receive funding for our mining project after receipt of necessary mining permits.  Mr. Moe has agreed to voluntarily resign as a director and any office held by him upon our receipt of the funding.  The effective date of the termination of the consulting agreement was made retroactive to April 30, 2013.  Pursuant to the terms of the termination agreement, we have agreed to indemnify Mr. Moe to the fullest extent provided by Nevada law for his service as a director or consultant.

On June 24, 2013, we entered into an agreement with Robert E. Jorgensen, one of our directors, to terminate the employment agreement dated September 1, 2010, as amended on May 3, 2011, between him and our company. Under the terms of the termination agreement, we have agreed to pay Mr. Jorgensen a severance fee of $120,000 at the rate of $6,000 per month beginning with the first month following the date on which we receive funding for our mining project after receipt of necessary mining permits.  We also agreed to issue to him 150,000 shares of common stock as a severance benefit.  The effective date of the termination of the consulting agreement was made retroactive to April 30, 2013.  Pursuant to the terms of the termination agreement, we have agreed to indemnify Mr. Jorgensen to the fullest extent provided by Nevada law for his service as an officer, director or employee.

In June 2011, an agreement was made with West C Street, LLC and Ibearhouse, LLC to begin paying the monthly interest pursuant to promissory notes due in stock rather than cash.  Total shares issued in 2013 and 2012 for interest payable were 96,426 and 128,568. Shares issued in 2014 for interest payable at December 31, 2013 was 32,142.  In addition, 150,000 shares were issued to each of the convertible note holders on each of November 30, 2013 and 2012 as penalty shares in connection with the extensions of the due dates of the convertible debt for two, one year periods.

In December 2009 we entered into a consulting agreement with Stuart Havenstrite, the father of Rick Havenstrite, our President and a director.  Pursuant to the agreement Mr. Havenstrite has agreed to provide geological services for our mining project.  The term of the agreement was for one year and we have agreed to compensate him at his regular hourly fee, provided that the aggregate payable for any month shall not exceed $6,000.  Either party may terminate the agreement at any time for cause.  The agreement may be extended by the parties and thereafter cancelled without cause at any time.  Mr. Havenstrite earned $3,900 in 2013, which remained unpaid at December 31, 2013 and $23,295 in 2012 of which $11,271 remained unpaid at December 31, 2013.

Mr. Havenstrite’s wife has been employed on a part time basis to perform accounting and financial services for us.  In connection with this employment, Ms. Havenstrite earned $24,000 in 2013, all of which remained unpaid at December 31, 2013. In June of 2013, Mrs. Havenstrite became our principal financial officer.  For 2012, she and other family members earned $39,574 for accounting services.

On July 14, 2010, we entered into an Investment Agreement with DMRJ Group under which they agreed to provide loans of up to $6,500,000.  This agreement has been amended several times and our agreement with DMRJ is now governed by the Tenth Amendment to the Investment Agreement, dated February 19, 2014.  As part of these agreements, DMRJ has placed Daniel Small and David Levy, two of its principals, on our board of directors and, as a result of the issuance of Preferred Shares to DMRJ, DMRJ controls a majority of the outstanding votes of the Company.

Independent Directors

Our securities are not listed on a national securities exchange or in an inter-dealer quotation system which has requirements that directors be independent.  As a result, we have adopted the independence standards of the NYSE Amex Equities (formerly known as the American Stock Exchange) to determine the independence of our directors and those directors serving on our committees.  These standards provide that a person will be considered an independent director if he or she is not an officer of the company and is, in the view of the Company’s Board of Directors, free of any relationship that would interfere with the exercise of independent judgment.  Our board of directors has determined that none of the directors would be considered to be independent.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees Paid

Audit fees are comprised of amounts billed for the audit of our annual financial statements, review of our quarterly financial statements and other fees that are normally provided in connection with statutory and regulatory filings or engagements.  The aggregate fees billed for the fiscal years ended December 31, 2013 and 2012 by our independent registered public accounting firms are as follows:

Fiscal Year		Amount
2013		$	41,278
2012		$	44,911

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Audit related fees are comprised of amounts billed for assurance and related services that are reasonably related to the performance of the audit or review of the financial statements, other than those previously reported as audit fees.  We were not billed any such fees.

Tax fees are comprised of amounts billed for the preparation of our federal and state tax returns.  In 2012, we were billed $5,165 for income tax preparation.  We have not yet prepared our federal and state tax returns for 2012 or 2013.  We do not expect any tax liability for these years.

All other fees represent amounts billed for products or services provided by our independent registered public accounting firm. In 2012 and 2013 we were billed $1,940 and $0, respectively, for other services.

Audit Committee

Our Board of Directors performs the duties that would normally be performed by an audit committee.  Our Board of Directors believes that its current members have sufficient knowledge and experience necessary to fulfill the duties and obligations of the audit committee for our company.  The Board of Directors has determined that we do not have an audit committee financial expert, due to lack of funds.

PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES

The following exhibits are included with this report:

				Incorporated by Reference
Exhibit Number		Exhibit Description		Form		File No.		Exhibit		Filing Date		Filed Here- with
2.1 & 10.1		Agreement and Plan of Merger dated December 30, 2009, with Blue Fin Capital, Inc.		S-1		333-169701		2.1/10.1		9/30/10
3.1		Amended and Restated Articles of Incorporation		S-1		333-169701		3.1		9/30/10
3.2		Certificate of Designation for Series A Preferred Stock		S-1		333-169701		3.2		9/30/10
3.3		Amendment to Certificate of Designation for Series A Preferred Stock		8-K		333-169701		4.2		2/25/14
3.3		Certificate of Designations for Series A-1 and A-2 Preferred Stock		8-K		333-169701		3.1		5/9/11
3.4		Amendment to Certificate of Designations for Series A-1 and A-2 Preferred Stock		8-K		333-169701		4.3		2/25/14
3.5		Certificate of Designations for Series B Preferred Stock		8-K		333-169701		4.1		2/25/14
3.6		Amended and Restated Bylaws dated May 3, 2011		8-K		333-169701		3.2		5/9/11
4.1		Registration Rights Agreement dated May 3, 2011		8-K		333-169701		4.1		5/9/11
10.2		2008 Stock Option-Stock Issuance Plan, as amended*		8-K		333-169701		99.1		3/18/14
10.3		2008 Stock Option/Stock Issuance Plan, as amended grant forms*		S-1		333-169701		4.3/10.2		9/30/10
10.4		Amended and Restated Lease and Sublease Agreement effective July 24, 2009, with Clifton Mining Company and Woodman Mining Company		S-1		333-169701		10.3		9/30/10
10.5		Contract Assignment and Surety Transfer Agreement dated September 30, 2009, with Clifton Mining Company		S-1		333-169701		10.4		9/30/10
10.6		Amended and Restated Lease Agreement effective July 24, 2009, with Moeller Family Trust		S-1		333-169701		10.5		9/30/10

42

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10.7		Security Agreement dated July 14, 2010, with DMRJ Group I, LLC		S-1		333-169701		10.8		9/30/10
10.8		Pledge Agreement dated July 14, 2010, with DMRJ Group I, LLC		S-1		333-169701		10.9		9/30/10
10.9		Amended Loan Agreement dated July 14, 2010, with West C Street LLC and Ibearhouse, LLC		S-1		333-169701		10.11		9/30/10
10.10		Amended and Restated 15% Convertible Promissory Note dated July 14, 2010 with Ibearhouse, LLC, as corrected		8-K		333-169701		99.2		12/28/12
10.11		Ibearhouse Amendment to Amended and Restated Convertible Promissory Note, as corrected		8-K		333-169701		99.2		1/8/14
10.12		Share Conversion Agreement dated September 11, 2013		10-K		333-169701		10.15		4/16/13
10.13		Employment Agreement dated September 1, 2010, with Robert E. Jorgensen*		S-1		333-169701		10.14		9/30/10
10.14		Amendment dated May 3, 2011, to Employment Agreement dated September 1, 2010, with Robert E. Jorgensen*		10-K		333-169701		10.14		4/5/12
10.15		Termination of Employment Agreement dated June 24, 2013*										X
10.16		Employment Agreement dated September 1, 2010, with Rick Havenstrite*		S-1		333-169701		10.15		9/30/10
10.17		Consulting Agreement dated September 1, 2010, with Eric L. Moe*		S-1		333-169701		10.16		9/30/10
10.18		Amendment dated May 3, 2011, to Consulting Agreement dated September 1, 2010, with Eric L. Moe*		10-K		333-169701		10.17		4/5/12
10.19		Termination of Consulting Agreement dated June 18, 2013*										X
10.20		Consulting Agreement dated December 28, 2009 with Stuart Havenstrite		S-1		333-169701		10.17		9/30/10
10.21		Investment Agreement dated July 14, 2010, with DMRJ Group I, LLC		S-1A		333-169701		10.6		11.12/10
10.22		Rental Agreement effective October 1, 2010, with Robert E. Jorgensen		S-1A		333-169701		10.18		11.12/10
10.23		Rental Agreement effective October 1, 2009, with RMH Overhead, LLC		S-1A		333-169701		10.19		11.12/10
10.24		Amendment dated November 8, 2010 to Investment Agreement dated July 14, 2010, with DMRJ Group I, LLC		S-1A		333-169701		10.20		11.12/10
10.25		Second Amendment to Investment Agreement dated February 25, 2011		8-K		333-169701		99.1		3/3/11
10.26		Forbearance Agreement dated March 6, 2011		8-K		333-169701		99.2		3/15/11
10.27		Third Amendment to Investment Agreement dated March 11, 2011		8-K		333-169701		99.1		3/15/11
10.28		Fourth Amendment to Investment Agreement dated May 3, 2011		8-K		333-169701		99.1		5/9/11
10.29		Forbearance Agreement dated June 29, 2012		10-K		333-169701		10.30		4/16/13
10.30		Fifth Amendment to Investment Agreement dated October 16, 2012		8-K		333-169701		99.1		10/18/12
10.31		Sixth Amendment to Investment Agreement dated January 29, 2013		8-K		333-169701		99.1		2/7/13
10.32		Seventh Amendment to Investment Agreement										X
10.33		Eighth Amendment to Investment Agreement		8-K		333-169701		99.1		7/30/13
10.34		Ninth Amendment dated October 24, 2013 to Investment Agreement		10-Q		333-169701		10.1		11/14/13
10.35		Tenth Amendment to Investment Agreement, including Note		8-K		333-169701		99.1		2/25/14

43

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14.1

Code of Ethics adopted on March 21, 2011

10-K

333-169701

14.1

4/5/12

21.1

List of Subsidiaries

S-1

333-169701

21.1

9/30/10

23.1

Consent of DeCoria, Maichel & Teague, PS

X

31.1

Rule 15d-14(a) Certification by Principal Executive Officer

X

31.2

Rule 15d-14(a) Certification by Principal Financial Officer

X

32.1

Section 1350 Certification of Principal Executive Officer

X

32.2

Section 1350 Certification of Principal Financial Officer

X

95

Mine Safety Disclosure

X

101.INS

XBRL Instance Document

X

101.SCH

XBRL Taxonomy Extension Schema Document

X

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

X

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

X

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

X

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

X

*Management contract, or compensatory plan or arrangement, required to be filed as an exhibit.

Financial Statements Index	Page
Report of Independent Registered Public Accounting firm	F-1
Consolidated Balance Sheets, December 31, 2013 and 2012	F-2
Consolidated Statements of Operations, for the years ended December 31, 2013 and 2012 and from the Inception of the Development Stage through December 31, 2013	F-3
Consolidated Statements of Changes in Stockholders’ Equity (Deficit), from the Inception of the Development Stage through December 31, 2013	F-4
Consolidated Statements of Cash Flows, for the years ended December 31, 2013 and 2012 and from the Inception of the Development Stage through December 31, 2013	F-6
Notes to Consolidated Financial Statements, December 31, 2013 and 2012 and from the Inception of the Development Stage through December 31, 2013	F-8

[SIGNATURE PAGE FOLLOWS]

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DESERT HAWK GOLD, CORP.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

NAME		TITLE		DATE
/s/ Rick Havenstrite Rick Havenstrite		President & Director		April 11, 2014
/s/ David Levy David Levy		Director		April 11, 2014
/s/ Daniel Small Daniel Small		Director		April 11, 2014

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have not Registered Securities Pursuant to Section 12 of the Act

No annual report or proxy statement, form of proxy or other proxy soliciting material was sent or provided to shareholders during the year ended December 31, 2013.

45

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Desert Hawk Gold Corp

We have audited the accompanying consolidated balance sheet of Desert Hawk Gold Corp  (An Exploration Stage Company) (“the Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended. 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 consolidated financial position of Desert Hawk Gold Corp (An Exploration Stage Company) as of December 31, 2013 and 2012, and the results of its consolidated operations and its cash flows for the years then ended, 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 has an accumulated deficit through December 31, 2013. This factor raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/DeCoria, Maichel & Teague, PS

DeCoria, Maichel & Teague, PS

Spokane, Washington

April 2, 2014

F-1

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DESERT HAWK GOLD CORP

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

			December 31,			December 31,
			2013			2012
ASSETS
CURRENT ASSETS
	Cash		$	8,523		$	12,300
	Prepaid expenses and other current assets			103,068			138,382
	Total Current Assets			111,591			150,682
PROPERTY AND EQUIPMENT, net  (Note 6)				227,981			285,338
MINERAL PROPERTIES AND INTERESTS (Notes 5 and 8)				835,556			835,556
RECLAMATION BONDS (Notes 5 and 8)				155,316			152,923
TOTAL ASSETS			$	1,330,444		$	1,424,499
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
	Accounts payable and accrued expenses		$	197,970		$	141,263
	Accrued liabilities-officer wages (Note 8)			332,000			131,000
	Derivative liability-conversion option (Note 10)			-			140,798
	Interest payable			-			337,400
	Convertible debt (Note 9)			600,000			600,000
	Note payable (Notes 11 and 15)			-			5,876,698
	Total Current Liabilities			1,129,970			7,227,159
LONG-TERM LIABILITIES
	Stock redeemable with gold proceeds  (Note 7)			130,000			130,000
	Asset retirement obligation (Note 13)			69,920			63,584
	Interest payable			1,781,027			-
	Derivative liability-conversion option (Note 10)			170,813			-
	Note payable (Notes 11 and 15)			6,264,492			-
				8,416,252			193,584
TOTAL LIABILITIES				9,546,222			7,420,743
STOCKHOLDERS'  (DEFICIT) (Note 3)
	Preferred Stock, $0.001 par value, 10,000,000 shares authorized
	Series A:  958,033 shares issued and outstanding			958			958
	Series A-1: No shares issued and outstanding			-			-
	Series A-2: 180,000 shares issued and outstanding			180			180
	Common stock,  $0.001 par value, 100,000,000  shares authorized;      9,501,683 and 8,923,115 shares issued and outstanding, respectively			9,373			8,795
	Additional paid-in capital			6,950,076			6,410,654
	Accumulated deficit prior to exploration stage			(1,016,591)			(1,016,591)
	Accumulated deficit during exploration stage			(14,159,774)			(11,400,240)
	Total Stockholders' (Deficit)			(8,215,778)			(5,996,244)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)			$	1,330,444		$	1,424,499

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

F-2

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DESERT HAWK GOLD CORP

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

											Period from
											May 1, 2009
											(Inception of
					Year Ended						Exploration Stage)
					December 31,			December 31,			to December 31,
					2013			2012			2013
INCOME EARNED DURING EXPLORATION STAGE
	Concentrate sales				$	-		$	-		$	969,905
EXPENSES
	General project costs					212,830			183,944			1,882,519
	Exploration expense					79,759			281,361			1,731,704
	Consulting					10,000			123,000			595,404
	Officers salaries and directors fees					339,000			241,923			1,421,858
	Legal and professional					57,588			80,472			502,508
	General and administrative					96,608			153,392			695,540
	Depreciation					64,706			68,419			223,468
						860,491			1,132,511			7,053,001
OPERATING LOSS						(860,491)			(1,132,511)			(6,083,096)
OTHER INCOME (EXPENSE)
	Interest income and other income					2,393			1,342			66,586
	Income on joint venture agreement					-			200,000			200,000
	Change in fair value of derivatives					(30,015)			115,109			(36,138)
	Loss on extinguishment of debt  (Note 11)					-			(920,000)			(3,069,404)
	Financing expense					(300,000)			(484,548)			(1,632,311)
	Interest expense					(1,571,421)			(1,057,754)			(3,605,411)
						(1,899,043)			(2,145,851)			(8,076,678)
LOSS BEFORE INCOME TAXES						(2,759,534)			(3,278,362)			(14,159,774)
INCOME TAXES						-			-			-
NET LOSS					$	(2,759,534)		$	(3,278,362)		$	(14,159,774)
BASIC AND DILUTED NET LOSS PER SHARE					$	(0.31)		$	(0.39)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED						9,043,194			8,461,222

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

F-3

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DESERT HAWK GOLD CORP

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)

F-4

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