GOLDEN PHOENIX MINERALS INC - FORM 10-K

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EXCEL - IDEA: XBRL DOCUMENT - GOLDEN PHOENIX MINERALS INC	Financial_Report.xls
EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 - GOLDEN PHOENIX MINERALS INC	goldenexh312.htm
EX-23.1 - CONSENT OF INDEPENDENT REGISTERED ACCOUNTING FIRM - GOLDEN PHOENIX MINERALS INC	goldenexh231.htm
EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 - GOLDEN PHOENIX MINERALS INC	goldenexh311.htm
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 - GOLDEN PHOENIX MINERALS INC	goldenexh321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended December 31, 2014

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

For the Transition Period from ______ to ______

Commission File No. 000-22905

GOLDEN PHOENIX MINERALS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		41-1878178
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

125 East Main Street, Suite 602 American Fork, Utah		84003
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (801) 418-9378

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

(Title of Class)

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

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

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 þ No o

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 and post such files). Yes þ No o

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. o

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

(Do not check if a smaller reporting company)

Smaller reporting company þ

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

The aggregate market value of common stock held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2014, was $1,883,844.

The number of shares of registrant’s common stock outstanding as of March 27, 2015 was 456,773,907.

DOCUMENTS INCORPORATED BY REFERENCE:

None

TABLE OF CONTENTS

PART I

ITEM 1.	BUSINESS	1

ITEM 1A.	RISK FACTORS	4

ITEM 1B.	UNRESOLVED STAFF COMMENTS	11

ITEM 2.	PROPERTIES	11

ITEM 3.	LEGAL PROCEEDINGS	19

ITEM 4.	MINE SAFETY DISCLOSURES	19

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	20

ITEM 6.	SELECTED FINANCIAL DATA	21

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	30

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	30

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	30

ITEM 9A.	CONTROLS AND PROCEDURES	30

ITEM 9B.	OTHER INFORMATION	31

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	31

ITEM 11.	EXECUTIVE COMPENSATION	35

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	38

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	39

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	40

PART IV

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	41

	SIGNATURES	43

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” as such term is defined by the Securities and Exchange Commission in its rules, regulations and releases, which represent our expectations or beliefs, including but not limited to, statements concerning our operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “hope,” “intend,” “could,” “might,” “plan,” “predict” or “project” or the negative of these words or other variations on these words or comparable terminology.

Such forward-looking statements include statements regarding, among other things, (1) our estimates of mineral reserves and mineralized material, (2) our projected sales and profitability, (3) our growth strategies, (4) anticipated trends in our industry, (5) our future financing plans, (6) our anticipated needs for working capital, (7) our lack of operational experience, (8) our plans with respect to properties and programs, (9) our beliefs and expectations regarding litigation, (9) our position with respect to disputes, and (10) the benefits related to ownership of our common stock. These statements constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this filing generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Item 1A. Risk Factors” below and other risks and matters described in this filing and in our other SEC filings. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur as projected. We do not undertake any obligation to update any forward-looking statements.

PART I

ITEM 1. BUSINESS

As used in this Annual Report on Form 10-K, unless otherwise indicated, the terms “we,” “us,” “our,” and “the Company” refer to Golden Phoenix Minerals, Inc., a Nevada corporation.

Going Concern Qualification and Financial Status

The Report of Independent Registered Accounting Firm on our 2014 consolidated financial statements addresses an uncertainty, indicating that our operating losses and lack of working capital raise substantial doubt about our ability to continue as a going concern. We have a history of operating losses since our inception in 1997, and have an accumulated deficit of $60,626,496 and a total stockholders’ deficit of $1,379,437 at December 31, 2014. We currently have no operating revenues, and will require additional capital to fund our operations and to pursue mineral property opportunities with our existing properties and other prospects.

We completed the sale of our 10% ownership interest in the Santa Rosa, Panama gold project for $US 2.6 million. In February 2014, we received $260,000 of the sales proceeds and received the balance of $2,340,000 on April 23, 2014, net of certain fees and taxes. This funding has helped capitalize the Company, extinguish certain liabilities and will provide working capital to commence planned exploration activities on our joint-ventured Nevada properties.

We have entered into options and agreements for the acquisition of our Nevada mineral properties. None of these mineral properties currently have proven or probable reserves. We believe we will be required to raise significant additional capital to fund our operations and to complete the acquisition of the interests in and further the exploration, evaluation and development of our existing mineral properties and other prospects. There can be no assurance that we will be successful in raising the required capital at favorable rates or at all, or that any of these mineral properties will ultimately attain a successful level of operations. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws. These factors and our negative working capital position together raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Corporate History; Recent Events

We are a mineral exploration and development company, formed in Minnesota on June 2, 1997 and reincorporated in the State of Nevada in May 2008.

Our business includes acquiring mineral properties with potential production and future growth through exploration discoveries. Our current growth strategy is focused on the expansion of our operations through the development of mineral properties into joint ventures or royalty mining projects. Our current efforts are focused on our properties in Nevada.

As more fully described in the Notes to Consolidated Financial Statements and elsewhere in this annual report, we have entered into an agreement to acquire an 80% interest in the Vanderbilt Silver and Gold Project, the Coyote Fault Gold and Silver Project, and claims that are an extension to the Coyote Fault property, all located adjacent to the producing Mineral Ridge property near Silver Peak, Nevada (the “Mhakari Properties”). In addition, we entered into an agreement to acquire the rights to 16 unpatented lode mining claims on BLM lands in Esmeralda County, Nevada, also located near the Mineral Ridge property (the “North Springs Properties”).

We have contracted the professional mining services of Cardno MM&A (“Cardno”) to perform the technical evaluation of our Nevada mineral properties. We began first round evaluation on the Vanderbilt property, which we believe is a viable gold and silver exploration project. With the assistance of Cardno, we are currently permitting an exploration drilling program including up to 20 exploration drill holes using reverse circulation (“RC”). Other highlights include establishing survey control of the property’s three patent claims from 1876, contracting heavy equipment for access road improvement and drill pad construction, and establishing a strong, positive relationship with the local lead regulator office. We have also spent time evaluating the North Springs Properties, and have decided to defer future work on them.

Because of lack of funds and scaling back our operations, we allowed the remainder of our mineral property claims interests to lapse in 2013, and we have abandoned such other projects to focus on our Nevada properties, which in the opinion of management have the best potential for success.

As funding permits, we intend to continue to strategically acquire, explore and develop mineral properties. We plan to provide joint venture opportunities for mining companies to conduct exploration or development on mineral properties we own or control. We, together with any future joint venture partners, intend to explore and develop selected properties to a stage of proven and probable reserves, at which time we would then decide whether to sell our interest in a property or take the property into production alone or with our future partner(s). By joint venturing our properties, we may be able to reduce our costs for further work on those properties, while continuing to maintain and acquire interests in a portfolio of gold and base strategic metals properties in various stages of mineral exploration and development. We expect that this corporate strategy will minimize the financial risk that we would incur by assuming all the exploration costs associated with developing any one property, while maximizing the potential for success and growth.

Some of our more significant recent events are summarized as follows:

Sale of Interest in the Santa Rosa Mine, Panama

We have completed the sale of our 10% ownership interest in the Santa Rosa, Panama gold project for $US 2.6 million. In February 2014, we received $260,000 of the sales proceeds and received the balance of $2,340,000 in April 2014, net of certain fees and taxes. As a result, we recognized a gain on disposition of assets of $2,515,654 in our consolidated financial statements for the year ended December 31, 2014.

In September 2011, the Company and its partner formed a Panamanian corporation, subsequently renamed Vera Gold Corporation (“Vera Gold”), for the purpose of developing and operating mining concessions pertaining to the Santa Rosa Gold Mine located in the Province of Veraguas, Panama. Pursuant to an agreement entered into in July 2012, the Company and its partner agreed to terminate the original agreement to develop the Santa Rosa Gold Mine, and the Company retained a 10% interest in Vera Gold. On February 12, 2014, the Company completed negotiations for a Share Purchase Agreement, whereby it sold its 10% ownership in Vera Gold to certain foreign investors for US$2.6 million.

Ximen Mining Corp. Investment

In October 2014, we participated in a private placement in Ximen Mining Corp. (“Ximen”), a Canadian publicly listed mineral exploration company, with an investment of $124,000. We purchased 450,000 units consisting of one common share and one non-transferable warrant entitling us to purchase one further common share of Ximen at an exercise price of $0.40 per warrant share for a period of two years. Ximen is focused on the exploration and development of gold projects in southern British Columbia and currently has a 100% interest in two properties: the Gold Drop Project and the Brett Gold Project.

Sale of Ashdown NSR

On January 31, 2014, we sold for $45,000 our net smelter royalty return (“NSR”) interest relating to the operations conducted by or on behalf of the Ashdown Project, LLC (the “Ashdown Project”) on certain mining properties. We acquired the NSR pursuant to the sale of our ownership interest in the Ashdown Project in May 2009 and a subsequent Termination, Settlement and Release Agreement entered into in August 2011. The operations of the Ashdown Project are currently idle.

Management

The day-to-day operations of the Company continue to be managed by our Interim Governing Board (“IGB”) formed in June 2012 to develop legal strategy and establish the next steps for developing our mining projects. The IGB utilizes the collective strengths of our Board of Directors and management team and is currently comprised of three members, Donald Gunn, John Di Girolamo, and Jeffrey Dahl. Donald Gunn serves as Chair of the IGB, which has temporarily absorbed the position of Chief Executive Officer.

On August 20, 2014, we announced that Thomas Klein had resigned from the Company’s Board of Directors. Mr. Klein had been a Director since December 2008 and previously served as Chief Executive Officer of the Company from February 2010 until that position was absorbed by the creation of the IGB.

Our corporate directors and officers have prior management experience with large and small mining companies. We believe that we have created the basis for a competitive mineral exploration, development and operational company through assembling a group of individuals with experience in target generation, ore discovery, resource evaluation, mine development and mine operations.

We expect to retain up to a 30% interest in each project, and we anticipate our cash flow will be leveraged to the price of gold or the underlying strategic metal. Ultimately, we intend to convert some of our interests into royalty agreements.

Government Regulations and Permits

In connection with exploration, mining and milling activities, we are subject to extensive federal, state and local laws and regulations, domestic and international, governing the protection of the environment, including laws and regulations relating to protection of air and water quality, hazardous waste management and mine reclamation as well as the protection of endangered or threatened species.

We are required to comply with numerous environmental laws and regulations imposed by federal and state authorities within the United States. At the federal level, legislation such as the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response Compensation Liability Act and the National Environmental Policy Act impose effluent and waste standards, performance standards, air quality and emissions standards and other design or operational requirements for various components of mining and mineral processing, including molybdenum, gold and silver mining and processing.

At present, we do not employ any individuals at our mining properties; we utilize the services of consultants and independent contractors, which are regulated by the Mine Safety and Health Administration (MSHA), a federal agency within the United States.

Our planned exploration activities at the Mhakari and North Springs properties do not require permits or bonding, but will be necessary for proposed future work programs.

If we or the operators of the properties in which we have an interest cannot obtain or maintain the necessary permits, or if there is a delay in receiving such permits, our timetable and business plan for development and mining of these properties could be adversely affected. See “Item 1A. Risk Factors” for more information.

Competition And Mineral Prices

The mining industry has historically been intensely competitive and the increasing price of gold since 2002 has led a number of companies to begin once again to aggressively acquire claims and properties.

Employees

As of the date of this filing, we currently have no full-time employees. We have contracts with various independent contractors and consultants to fulfill our personnel needs, including management, accounting, investor relations, exploration, development, permitting, and other administrative functions, and may staff further with employees as funding permits and as we bring new projects on line.

Corporate Office

Currently, our principal executive office consists of shared space on a month-to-month basis located at 125 East Main Street, Suite 602, American Fork, Utah 84003.

ITEM 1A. RISK FACTORS

We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. The risks described below should be considered carefully when assessing an investment in our common stock. The occurrence of any of the following events could harm us and these risks are not the only ones that we face. If these events occur, our business, operating results or financial condition could suffer and stockholders may lose part or even all of their investment.

RISKS RELATED TO OUR BUSINESS, OPERATIONS AND INDUSTRY

We Have Incurred Significant Losses Since our Inception in 1997 And May Never Be Profitable.

We have yet to establish any history of profitable operations. At December 31, 2014 we had an accumulated deficit of $60,626,496. We currently have no operating revenues and our only source of operating revenues for the past few years has been minimal rental income from our drilling equipment. We have sold the assets of our drilling division, and will have no more revenues from this source. Our profitability will require the successful commercialization of our mineral interests.

We may not be able to successfully commercialize our mineral interests or ever become profitable.

We Have Limited Cash and Current Liabilities That Significantly Exceed Our Current Assets.

At December 31, 2014, we had current assets of $911,980 and current liabilities of $2,291,493, resulting in a working capital deficit of $1,379,513. Included in current assets at December 31, 2014 was cash of $642,990. We currently have no operating revenues and we have significantly scaled back our mineral property acquisition and development plans and reduced the level of our operations. Although our capitalization has been improved with the proceeds from the sale of our interest in the Santo Rosa Mine, we will be required to raise additional capital. There can be no assurance that we will be successful in our efforts to obtain financing, or that we will be successful in our efforts to continue to raise capital at favorable rates or at all. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws.

We Will Require Significant Additional Capital to Continue our Exploration Activities, and, if Warranted, to Develop Mining Operations.

We will require significant additional funding for geological and geochemical analysis, metallurgical testing, and, if warranted, feasibility studies with regard to the results of our exploration. We may not benefit from such investments if we are unable to identify a commercial ore deposit. If we are successful in identifying reserves, we will require significant additional capital to establish a mine and construct a mill and other facilities necessary to mine those reserves. That funding, in turn, will depend upon a number of factors, including the state of the national and worldwide economy and the price of gold and other metals. We may not be successful in obtaining the required financing for these or other purposes, which would adversely affect our ability to continue operating. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and the possible, partial or total loss of our potential interest in certain properties.

There Is Doubt About Our Ability To Continue As A Going Concern Due To Recurring Losses From Operations, And Accumulated Deficit, All Of Which Mean That We May Not Be Able To Continue Operations.

The Report of Independent Registered Accounting Firm on our 2014 consolidated financial statements addresses an uncertainty, indicating that our operating losses and lack of working capital raise substantial doubt about our ability to continue as a going concern. We have a history of operating losses since our inception in 1997, and have an accumulated deficit of $60,626,496 and a total stockholders’ deficit of $1,379,437 at December 31, 2014. We currently have no operating revenues. We will require additional capital to fund our operations and to pursue mineral property development opportunities with our existing properties and other prospects.

Fluctuating Gold and Silver Prices Could Negatively Impact our Business Plan.

The potential for profitability of gold and silver mining operations at our joint ventured properties and properties that we are actively exploring with an option to acquire, is directly related to the market prices of gold and silver. The prices of gold and silver may also have a significant influence on the market price of our common stock. In the event that we obtain positive feasibility results and progress to a point where a commercial production decision can be made, our decision to put a mine into production and to commit the funds necessary for that purpose must be made long before any revenue from production would be received. A decrease in the price of gold or silver at any time during future exploration, development or mining may prevent our properties from being economically mined or result in the impairment of assets as a result of lower gold or silver prices. The prices of gold and silver are affected by numerous factors beyond our control, including inflation, fluctuation of the United States dollar and foreign currencies, global and regional demand, the purchase or sale of gold by central banks, and the political and economic conditions of major gold producing countries throughout the world.

Although it may be possible for us to protect against future gold and silver price fluctuations through hedging programs, the volatility of metal prices represents a substantial risk that is impossible to completely eliminate by planning or technical expertise.

We May Be at Risk of Losing an Interest in or Failing to Consummate Option and Acquisition Transactions With Respect to our Nevada Property Interests if we Fail to Perform Our Obligations.

Under the terms of our Amended and Restated Option Agreement with Mhakari, we are required to meet certain obligations in order to attain an 80% interest in the Vanderbilt, Coyote Fault and Coyote Extension properties. In addition, under the terms of an Exploration and Mining Lease with Options to Purchase Agreement for our North Springs Properties, we have significant future cash and equity payment obligations. If we fail to make the required cash and equity payments and make the minimum exploration and development expenditures in a timely manner or to perform our other obligations as required under the agreements, we are at risk that the interests in our Nevada properties will be lost.

We May Not Have Access To Capital In The Future As A Result Of Disruptions In Capital And Credit Markets.

Our ability to access capital or credit necessary to continue operations may be hindered by the continuing difficulties in the capital and credit markets both in the U.S. and internationally. Moreover, longer term volatility and continued disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation of financial institutions, reduced alternatives or failures of significant financial institutions could affect adversely our access to the liquidity needed for our business in the longer term. Such disruptions could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. The disruptions in the capital and credit markets have also resulted in higher interest rates on publicly issued debt securities and increased costs under credit facilities. The continuation of these disruptions could increase our interest expense and capital costs and could affect adversely our results of operations and financial position including our ability to grow our business through joint ventures, sales or acquisitions.

We May Not Be Able To Secure Additional Financing To Meet Our Future Capital Needs Due To Changes In General Economic Conditions.

We anticipate needing significant capital to conduct further exploration and development needed to fulfill our outstanding obligations under our option and acquisition agreements to acquire property interests, repay outstanding debt obligations, bring our existing mining properties into production, and meet ongoing operating expenses. We may use capital more rapidly than currently anticipated and incur higher operating expenses than currently expected, and we will be required to depend on external financing to satisfy our operating and capital needs. We will need new or additional financing in the future to conduct our operations or expand our business. Any sustained weakness in the general economic conditions and/or financial markets in the United States or globally could affect adversely our ability to raise capital on favorable terms or at all. From time to time we have relied, and may also rely in the future, on access to financial markets as a source of liquidity to satisfy working capital requirements and for general corporate purposes. We may be unable to secure additional debt or equity financing on terms acceptable to us, or at all, at the time when we need such funding. If we do raise funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders would be reduced, and the securities that we issue may have rights, preferences or privileges senior to those of the holders of our common stock or may be issued at a discount to the market price of our common stock which would result in dilution to our existing stockholders. Our inability to raise additional funds on a timely basis would make it difficult for us to achieve our business objectives and would have a negative impact on our business, financial condition and results of operations.

The Development and Completion of Our Properties Entail Significant Risks.

The development of mineral deposits involves significant risks that even the best evaluation, experience and knowledge cannot eliminate. The economic feasibility of our mining properties is based upon a number of factors, including estimations of reserves and mineralized material, extraction and process recoveries, engineering, capital and operating costs, future production rates and future prices of precious metals.

The Validity Of Our Unpatented Mining Claims Could Be Challenged, Which Could Force Us To Curtail Or Cease Our Business Operations.

A significant portion of our properties consist of unpatented mining claims, which we own or lease. These claims are located on federal land or involve mineral rights that are subject to the claims procedures established by the General Mining Law of 1872. We must make certain filings with the county in which the land or mineral is situated and with the Bureau of Land Management and pay annual holding fees of $133.50 per claim. If we fail to make the annual holding payment or make the required filings, our mining claim could be void or voidable. Because mining claims are self-initiated and self-maintained rights, they are subject to unique vulnerabilities not associated with other types of property interests. It is difficult to ascertain the validity of unpatented mining claims from public property records and, therefore, it is difficult to confirm that a claimant has followed all of the requisite steps for the initiation and maintenance of a claim. The General Mining Law requires the discovery of a valuable mineral on each mining claim in order for such claim to be valid, and rival mining claimants and the United States may challenge mining claims. Under judicial interpretations of the rule of discovery, the mining claimant has the burden of proving that the mineral found is of such quality and quantity as to justify further development, and that the deposit is of such value that it can be mined, removed and disposed of at a profit. The burden of showing that there is a present profitable market applies not only to the time when the claim was located, but also to the time when such claim’s validity is challenged. However, only the federal government can make such challenges; they cannot be made by other individuals with no better title rights than us. It is therefore conceivable that, during times of falling metal prices, claims that were valid when they were located could become invalid if challenged. Title to unpatented claims and other mining properties in the western United States typically involves certain other risks due to the frequently ambiguous conveyance history of those properties, as well as the frequently ambiguous or imprecise language of mining leases, agreements and royalty obligations. No title insurance is available for mining. In the event we do not have good title to our properties, we would be forced to curtail or cease our business operations.

Environmental Controls Could Curtail Or Delay Exploration And Development Of Our Mines And Impose Significant Costs On Us.

We are required to comply with numerous environmental laws and regulations imposed by federal and state authorities. At the federal level, legislation such as the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response Compensation Liability Act and the National Environmental Policy Act impose effluent and waste standards, performance standards, air quality and emissions standards and other design or operational requirements for various components of mining and mineral processing, including molybdenum, gold and silver mining and processing. In addition, insurance companies are now requiring additional cash collateral from mining companies in order for the insurance companies to issue a surety bond. This addition of cash collateral for a bond could have a significant impact on our ability to bring properties into production.

Many states, including the State of Nevada (where current mineral property interests are located), have also adopted regulations that establish design, operation, monitoring, and closing requirements for mining operations. Under these regulations, mining companies are required to provide a reclamation plan and financial assurance to ensure that the reclamation plan is implemented upon completion of mining operations. Additionally, Nevada and other states require mining operations to obtain and comply with environmental permits, including permits regarding air emissions and the protection of surface water and groundwater. Although we believe that we are currently in compliance with applicable federal and state environmental laws, changes in those laws and regulations may necessitate significant capital outlays or delays, may materially and adversely affect the economics of a given property, or may cause material changes or delays in our intended exploration, development and production activities. Any of these results could force us to curtail or cease our business operations.

Our Exploration Activities and Operations in the U.S. and Abroad Are Subject to the Risks of Doing Business.

Exploration, development, production and mine closure activities are subject to political, economic and other risks of doing business, including, but not limited to:

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changes in laws or regulations;

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royalty and tax increases or claims, including retroactive increases and claims and requests to renegotiate terms of existing royalties and taxes, by governmental entities, including such increases, claims and/or requests by the governments of the United States and the State of Nevada, Canada and Peru;

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increases in training and other costs and challenges relating to requirements by governmental entities to employ the nationals of the country in which a particular operation is located;

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delays in obtaining or renewing, or the inability to obtain, maintain or renew, necessary governmental permits and approvals;

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claims for increased mineral royalties or ownership interests by local or indigenous communities;

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disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act;

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expropriation or nationalization of property;

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currency fluctuations, particularly in countries with high inflation;

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foreign exchange controls;

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restrictions on the ability of local operating companies to sell gold offshore for U.S. dollars, or on the ability of such companies to hold U.S. dollars or other foreign currencies in offshore bank accounts;

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import and export regulations, including restrictions on the export of gold;

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restrictions on the ability to pay dividends offshore or to otherwise repatriate funds;

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risk of loss due to acts of war, terrorism, civil strife or guerrilla activities;

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risk of loss due to any criminal activities such as trespassing, theft or illegal mining;

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risk of loss due to disease and other potential endemic health issues;

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disadvantages relating to submission to the jurisdiction of foreign courts or arbitration panels or enforcement or appeals of judgments at foreign courts or arbitration panels against a sovereign nation within its own territory; and

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other risks arising out of foreign sovereignty over the areas in which our exploration activities and operations are conducted.

As a result, our exploration, development and potential production activities may be affected by these and other factors, many of which are beyond our control, and some of which, individually or in the aggregate, could materially adversely affect our financial position or results of operations.

Proposed Legislation Affecting The Mining Industry Could Have An Adverse Effect On Us.

During the past several years, the United States Congress considered a number of proposed amendments to the General Mining Law of 1872, which governs mining claims and related activities on federal lands. For example, a broad based bill to reform the General Mining Law of 1872, the Hardrock Mining and Reclamation Act of 2007 (H.R. 2262) was introduced in the U.S. House of Representatives on May 10, 2007 and was passed by the U.S. House of Representatives on November 1, 2007, and has been submitted to the U.S. Senate where no action has been taken to date.

In 1992, a federal holding fee of $100 per claim was imposed upon unpatented mining claims located on federal lands. This fee was increased to $125 per claim in 2005 ($133.50 total with the accompanying County fees included). Beginning in October 1994, a moratorium on processing of new patent applications was approved. In addition, a variety of legislation over the years has been proposed by the United States Congress to further amend the General Mining Law. If any of this legislation is enacted, the proposed legislation would, among other things, change the current patenting procedures, limit the rights obtained in a patent, impose royalties on unpatented claims, and enact new reclamation, environmental controls and restoration requirements.

For example, the Hardrock Mining and Reclamation Act of 2007 (H.R. 2262), if enacted, would have several negative impacts on us, including but not limited to: requiring royalty payments of 8% of gross income from mining a claim on Federal land, or 4% of claims on Federal land that existed prior to the passage of this act; and prohibition of certain areas from being open to the location of mining claims, including wilderness study areas, areas of critical environmental concern, areas included in the National Wild and Scenic Rivers System, and any area included in maps made for the Forest Service Roadless Area Conservation Final Environmental Impact Statement.

The extent of any such changes to the General Mining Law of 1872 that may be enacted is not presently known, and the potential impact on us as a result of future congressional action is difficult to predict. If enacted, the proposed legislation could adversely affect the economics of developing and operating our mines because many of our properties consist of unpatented mining claims on federal lands. Our financial performance could therefore be materially and adversely affected by passage of all or pertinent parts of the proposed legislation, which could force us to curtail or cease our business operations.

The Development And Operation Of Our Mining Projects Involve Numerous Uncertainties.

Mine development projects, including our planned projects, typically require a number of years and significant expenditures during the development phase before production is possible.

Development projects are subject to the completion of successful feasibility studies, issuance of necessary governmental permits and receipt of adequate financing. The economic feasibility of development projects is based on many factors such as:

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estimation of reserves;

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anticipated metallurgical recoveries;

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future gold and silver prices; and

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anticipated capital and operating costs of such projects.

Our mine development projects may have limited relevant operating history upon which to base estimates of future operating costs and capital requirements. Estimates of proven and probable reserves and operating costs determined in feasibility studies are based on geologic and engineering analyses.

Any of the following events, among others, could affect the profitability or economic feasibility of a project:

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unanticipated changes in grade and tonnage of material to be mined and processed;

●

unanticipated adverse geotechnical conditions;

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incorrect data on which engineering assumptions are made;

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costs of constructing and operating a mine in a specific environment;

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availability and cost of processing and refining facilities;

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availability of economic sources of power;

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adequacy of water supply;

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adequate access to the site;

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unanticipated transportation costs;

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government regulations (including regulations relating to prices, royalties, duties, taxes, restrictions on production, quotas on exportation of minerals, as well as the costs of protection of the environment and agricultural lands);

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fluctuations in metal prices; and

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accidents, labor actions and force majeure events.

Any of the above referenced events may necessitate significant capital outlays or delays, may materially and adversely affect the economics of a given property, or may cause material changes or delays in our intended exploration, development and production activities. Any of these results could force us to curtail or cease our business operations.

Mineral Exploration Is Highly Speculative, Involves Substantial Expenditures, And Is Frequently Non-Productive.

Mineral exploration involves a high degree of risk and exploration projects are frequently unsuccessful. Few prospects that are explored end up being ultimately developed into producing mines. To the extent that we continue to be involved in mineral exploration, the long-term success of our operations will be related to the cost and success of our exploration programs. We cannot assure you that our mineral exploration efforts will be successful. The risks associated with mineral exploration include:

●

The identification of potential economic mineralization based on superficial analysis;

●

the quality of our management and our geological and technical expertise; and

●

the capital available for exploration and development.

Substantial expenditures are required to determine if a project has economically mineable mineralization. It may take several years to establish proven and probable reserves and to develop and construct mining and processing facilities. Because of these uncertainties, our current and future exploration programs may not result in the discovery of reserves, the expansion of our existing reserves or the further development of our mines.

Mining Risks And Insurance Could Have An Adverse Effect On Potential Future Profitability.

Our operations are subject to all of the operating hazards and risks normally incident to exploring for and developing mineral properties, such as unusual or unexpected geological formations, environmental pollution, personal injuries, flooding, cave-ins, changes in technology or mining techniques, periodic interruptions because of inclement weather and industrial accidents. Although we plan to maintain insurance when needed to ameliorate some of these risks, such insurance may not continue to be available at economically feasible rates or in the future be adequate to cover the risks and potential liabilities associated with exploring, owning and operating our properties. Either of these events could cause us to curtail or cease our business operations.

RISKS ASSOCIATED WITH OUR COMMON STOCK

The Market Price Of Our Common Stock Is Highly Volatile, Which Could Hinder Our Ability To Raise Additional Capital.

The market price of our common stock has been and is expected to continue to be highly volatile. Several factors, including regulatory matters, concerns about our financial condition, operating results, litigation, government regulation, the price of gold, silver and other precious metals, developments or disputes relating to agreements, title to our properties or proprietary rights, may have a significant impact on the market price of our stock. The range of the high and low bid prices of our common stock over the last three years has been between $0.10 and $0.0009. In addition, potential dilutive effects of future sales of shares of common stock by shareholders and by us, and subsequent sale of common stock by the holders of warrants and options could have an adverse effect on the price of our securities, which could hinder our ability to raise additional capital to fully implement our business, operating and development plans.

Penny Stock Regulations Affect Our Stock Price, Which May Make It More Difficult For Investors To Sell Their Stock.

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the SEC. Penny stocks generally are equity securities with a price per share of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Our securities are subject to the penny stock rules, and investors may find it more difficult to sell their securities.

We Have Never Paid Dividends on Our Common Stock and We Do Not Anticipate Paying Any in the Foreseeable Future.

We have not paid dividends on our common stock to date, and we may not be in a position to pay dividends in the foreseeable future. Our ability to pay dividends will depend on our ability to successfully develop one or more properties and generate revenue from operations. Further, our initial earnings, if any, will likely be retained to finance our growth. Any future dividends will depend upon our earnings, our then-existing financial requirements and other factors and will be at the discretion of our Board of Directors.

Completion of One or More New Acquisitions Could Result in the Issuance of a Significant Amount of Additional Common Stock, Which May Depress the Trading Price of Our Common Stock.

In the event we acquire one or more additional mineral properties for consideration consisting in whole or in part of shares of our common stock, such transaction could result in the issuance of a significant amount of common stock. Such issuance could depress the trading price of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

Mining Properties And Projects

Our business includes acquiring mineral properties with potential production and future growth through exploration discoveries. Pending requisite funding, our current growth strategy is focused on the expansion of our operations through the development of mineral properties into joint ventures or royalty mining projects. Our current efforts are focused on our properties in Nevada. These properties are early exploration stage and we have not developed any future exploration plans due to the lack of funding.

We have entered into an agreement to acquire an 80% interest in the “Mhakari Properties”, which include the Vanderbilt Silver and Gold Project, the Coyote Fault Gold and Silver Project, and Galena Flat Gold Project, and claims that are an extension to the Coyote Fault property, all located adjacent to the producing Mineral Ridge property near Silver Peak, Nevada In addition, we entered into an agreement to acquire the rights to the “North Springs” properties consisting of 16 unpatented lode mining claims in three claim blocks on BLM lands in Esmeralda County, Nevada, also located near the Mineral Ridge property .

Mhakari Legal Agreement

On February 26, 2013, we entered into an Amended and Restated Option Agreement with Mhakari Gold (Nevada) Inc. (“Mhakari”) with respect to the Mhakari Properties, which terminated all rights and obligations under prior agreements and restated the parties’ agreement with respect to each of the Mhakari Properties.

Mhakari granted us an option to acquire up to an undivided 80% interest in the Mhakari Properties, which consist of three separate unpatented mining claims blocks, for the following consideration to be paid by us to Mhakari:

Cash payments: $25,500, payable $20,000 upon execution of the agreement and $5,500 within 60 days thereafter; $20,000 payable on the 3 month anniversary of the agreement; $15,000 on the 6 month and 9 month anniversary of the agreement; and $50,000 on the 15 month anniversary of the agreement.

Equity payments: 8,000,000 shares of our common stock upon the execution of the agreement; an additional 7,000,000 shares of our common stock on the 4 month anniversary of the agreement; and an additional 5,000,000 shares on the 12 month anniversary of the agreement.

Work commitment: $500,000 in exploration and development expenditures on the Mhakari Properties within 18 months of the date of the agreement; an additional $500,000 in exploration and development expenditures between 18 months and 30 months from the date of the agreement; with no less than $2,000,000 in exploration and development expenditures in the aggregate within 48 months from the date of the agreement. Inclusive in this work commitment, we are to earmark no less than $10,000 per contract year for 4 years to enhancing safety on the Mhakari Properties.

As of the date of filing this report, we have met the cash payments and equity payments obligations but were not current on the work commitment obligations. We are currently in discussions with Mhakari and anticipate reaching an agreement on a revised work commitment schedule and beginning our work commitment in the near future as funding permits. Upon satisfying the consideration payable under the agreement, we shall receive an 80% undivided interest in the Mhakari Properties and the parties shall enter into a joint venture to further develop the Mhakari Properties, with us retaining an 80% interest in the joint venture. In the event that we fail to satisfy the entire purchase price by completing all cash, equity and work commitment payments within the required time frames, the agreement will be deemed to have been terminated and all payments made to date will be forfeited to Mhakari with no interest earned by us in the Mhakari Properties.

North Springs Legal Agreement

Under the terms of an Exploration and Mining Lease with Options to Purchase Agreement effective June 17, 2013 (the “North Springs Agreement”), we acquired the rights to 16 unpatented lode mining claims, which consists of three separate unpatented lode mining claims, on BLM lands in Esmeralda County, Nevada, located near the operating Mineral Ridge gold project (the “North Springs Properties”). As required by the North Springs Agreement, we made advance royalty payments of $5,000 cash in June 2013 and issued 1,000,000 shares of our common stock in July 2013. We are further obligated to make the following payments under the terms of the North Springs Agreement:

Date	Cash Payment		Common Share Payment

First Anniversary of Effective Date	$	10,000	1,000,000 shares
Second Anniversary of Effective Date	$	15,000	1,000,000 shares
Third Anniversary of Effective Date	$	20,000	1,000,000 shares
Fourth Anniversary of Effective Date	$	25,000	1,000,000 shares
Fifth Anniversary of Effective Date	$	30,000

Six through Tenth Anniversary of Effective Date	$	50,000
Eleventh through Fifteenth Anniversary of Effective Date	$	75,000
Sixteenth and Each Subsequent Anniversary of Effective Date	$	100,000

We made the Second Anniversary cash payment and common share payment during the year ended December 31, 2014, and are current on our obligations under the North Springs Agreement.

Subject to prior termination, the term of the North Springs Agreement shall be for a period of twenty years commencing on the effective date. The Company is obligated to pay a production royalty equal to three percent of the Net Smelter Returns (“NSR”) from the production or sale of minerals from the North Springs Properties and meet defined minimum annual work commitments ranging from $10,000 in the first year to $100,000 beginning in the fifth year and thereafter

Because of lack of funds and scaling back our operations, we allowed the remainder of our mineral property claims interests to lapse in 2013, and we have abandoned the projects to focus on our Nevada properties, which in the opinion of management have the best potential for success.

Mhakari Properties

The Mhakari properties are all in early stage exploration and do not contain any reserves. Of the three properties held under the Mhakari Option Agreement, the Vanderbilt and Coyote Fault properties have received all the past work, which consisted of sampling and mapping. Because the three properties are exploration in nature, there is no infrastructure established. If the Company is successful with establishing mineable reserves, then power and water would have to be established from the nearby town of Silver Peak.

Total costs incurred on the Mhakari Properties through December 31, 2014 were $1,466,530. Current lack of funding has precluded us from developing any future plans for exploration activities; therefore, we are currently unable to estimate future exploration costs. Absent an exploration plan, we anticipate that future costs for the Mhakari properties will consist of annual minimum claim maintenance costs estimated at approximately $26,000 per year.

Vanderbilt

The Vanderbilt property is located within 4 miles of the town of Silver Peak, Nevada and highway 265 via Coyote Road. It is comprised of 44 claims, plus 3 patented claims for a total of 900 acres and is located on the southern flank of Mineral Ridge within the Silver Peak Range. The Vanderbilt property is within the middle of the Walker Lane tectonic belt with the Sierra uplift to the west and the Basin and Range to the east. The claim name designations include the 5 Van, 39 Dock unpatented lode mining claims and the patented claims called the Vanderbilt Extension, Pocotillo and Vanderbilt. Access is achieved by four wheel drive trucks over steep rocky roads. The Company controls the subsurface mineral rights, but the surface is controlled by the Bureau of Land Management (BLM). There are currently no formal permits with the BLM, but access and work is allowed on a casual basis.

The underlying rocks found at Vanderbilt are part of the Mineral Ridge Metamorphic Core Complex (MRMCC) and include granite, Wyman Formation slates and phyllites, and Reed Formation marble. Gold and silver mineralization is found in flat lying fault zones in the Wyman associated with quartz veins and stockworks.

The Vanderbilt property was first developed around 1860 by prospectors looking for gold. They developed a number of small tunnels and shafts where the quartz veins contained high values of gold and silver. This material was transported to Silver Peak and milled where access to water was possible. There are no hazardous materials on the property, and the old mine workings have been fenced for public safety. The Company has not to this date conducted any road building or other surface disturbance. Future drilling work will require an approved BLM Notice of Exploration (NOI) and a posted reclamation bond before such work is conducted.

Phase I geologic mapping and outcrop sampling (above ground) was completed in October 2010, resulting in average grades of 2.1 g/t gold and 58.6 g/t silver. A Phase II exploration program (below ground) in the old mine workings was commenced during the first quarter of 2011 to help identify drill targets. The average assay value of the channel samples collected from the old mine tunnels was 9.04 g/t gold and 140 g/t silver, utilizing a 1.0 g/t cutoff value. These sample assay results were obtained from ALS Global Laboratories using fire assay/atomic absorption assay techniques. ALS is an international analytical laboratory used by numerous mining companies globally. An exploratory drill program is expected to begin as funding is obtained and the Company receives permits from the BLM.

Coyote Fault/Coyote Fault Extension

The Coyote Fault/Coyote Fault Extension claim block is within nine miles of Silver Peak, Nevada and Hwy 265 via Coyote Road. This property is considered to be an early stage exploration project. The property consists of 110 contiguous unpatented mining claims having a total of 2,200 acres. The claim block is represented with claims labeled CF 1 to CF 37 and SP 1 to SP71. The property is on the northern flank of Mineral Ridge and is along the eastern edge of the Silver Peak Range. Access is achieved by four-wheel drive truck over graded roads followed by steep rocky roads

The underlying rocks found at Coyote Fault are part of the Mineral Ridge Metamorphic Core Complex (MRMCC) and include granite, Wyman Formation slates and phyllites, and Reed Formation marble. Gold and silver mineralization is found in flat lying fault and shear zones in the Wyman associated with quartz veins and stockworks.

Phase I geologic mapping and outcrop sampling (above ground) was completed on the Coyote Fault claim group in December 2010, which identified a new potential gold exploration target. These sample results were obtained from ALS Global Laboratories using fire assay/atomic absorption assay techniques.

Currently, the Company has not conducted any surface work such as road building and no exploration plans have been developed at this time.

Galena Flat

The Galena Flat claims are found about 4 miles from Silver Peak, Nevada and can be accessed by dirt road from the historic town site of Blair off of State Highway 265. The project is in early stage exploration and consists of 24 unpatented lode mining claims for a total of 480 acres. The claim block is identified with claim names GF 1 to GF 24. Access is achieved by four wheel drive trucks over steep rocky roads

The underlying rocks found at Galena Flat are part of the Mineral Ridge Metamorphic Core Complex (MRMCC) and include granite, Wyman Formation slates and phyllites, and Reed Formation marble. Gold and silver mineralization is found in flat lying fault zones in the Wyman associated with quartz veins and stockworks.

Very little exploration work has been conducted on the Galena Flat Project. No sampling or mapping or any surface work such as road building has been conducted and no exploration plans have been developed at this time.

North Springs Properties

The North Springs Properties are located along the western margin of the Mineral Ridge Mining District, approximately 8 miles west of the town of Silver Peak and 3 miles west of the Mineral Ridge open pit and underground mines. This property consists of 16 unpatented lode mining claims in three separate blocks totaling 320 acres.

The North Springs Properties, Mhakari Properties and the Mineral Ridge gold mine deposits are situated along a regional northwest trending, large anticline known as the Mineral Ridge Metamorphic Core Complex. This geologic complex hosts extensive high-grade gold and stacked, low angle, shear zones, which has been open pit mined in several deposits at the Mineral Ridge mine. The North Springs Properties occupies similar geological environment to the Mineral Ridge deposits.

The North Springs Properties consist of three separate claim blocks and are identified as NS 1 through NS 8 (Roadrunner or North Springs prospect), NSP 29 and 30 (North Springs Pediment prospect) and CS 1 through CS 6 (Coyote Summit prospect) for a total of 16 claims or 320 acres. The claims are located on BLM administered lands. Access is from Silver Peak about 10 miles west along the Coyote dirt road by four wheel drive truck. Each claim block is easily reached by following good secondary dirt roads to each area.

The three North Springs claim blocks are all underlain by granite and a minor veneer of Wyman phyllite. Considerable rock chip sampling has been conducted to determine if anomalous gold and silver values exist on the properties. Only one of the three properties has returned chip samples with gold values that are of interest. This area, called North Springs, contains anomalous gold mineralization over an area approximately 75 feet wide by 300 feet long. Inspection of the some of the exposed shafts and cuttings from a rotary hole suggests the mineralized zone is too small to host a gold deposit that could be mined at a profit. The other two blocks contain very low values of gold and do not contain a gold target.

There is no infrastructure available in the area. Water would need to be hauled in from Silver Peak to conduct an exploration drilling program. Certain hazards exist including open shafts and adits in all three claim blocks. The Company has previously not completed any surface disturbance such as road building on any one of the claim blocks.

There are no plans at this time to conduct exploration activities. The properties will be maintained until a decision on what to do with them is made.

Total costs incurred on the North Springs Properties through December 31, 2013 were $54,264. Should we elect to continue to hold and conduct exploration activities on the properties, our costs will include the advance royalty cash and share payments required in year two and thereafter as described above under North Springs Legal Agreement. In addition we estimate our annual obligation for minimum claim maintenance costs will approximate $3,000.

Other Related Disclosures

Any physical work conducted on any of the Company’s properties requires a Bureau of Land Management permit and reclamation bond. For less than 5 acres of proposed disturbance, a Notice of Intent Permit is required. A reclamation bond amount is calculated, and money is provided to an account that the BLM controls before work can begin. Depending upon the surface disturbance provided, the amount of bond money may range from $5,000 to $30,000. For work over 5 acres of disturbance, an Exploration Plan of Operations is required and would add a considerable amount of field study including cultural resource studies, biological studies and other concerns that are important for the public. Because the amount of work proposed for a POO is considerable, the bond amount may range from $20,000 to $100,000 depending on the size of the exploration program.

Any mining company engaged in exploration, development or mining activities face considerable risk due to the large number of state and federal regulation that require compliance. These regulations include surface degradation, air quality, water quality, chemical controls, mercury controls, and others. The Company would need to address socio-economic impacts of a large operation and understand those impacts. Any one of these issues may delay a project until specific compliance measures are addressed.

ITEM 3. LEGAL PROCEEDINGS

On May 22, 2013, Pinnacle Minerals Corporation, a Florida corporation (“Pinnacle”), sued the Company, seeking payments allegedly due on the two promissory notes issued in connection with a membership interest purchase agreement entered into as of March 7, 2011, relating to a Peruvian mining venture. The case was filed in the United States District Court for the District of Nevada, as “Pinnacle Minerals Corporation v. Golden Phoenix Minerals, Inc., Case number 2:13 – CV – 00915 – MMD – NJK. We filed a motion to stay the litigation and compel arbitration, pursuant to a provision of the subject purchase agreement. Based on negotiations, and agreement and stipulation between the parties, this case was dismissed on July 22, 2013. The parties have submitted the dispute to binding arbitration in Reno, Nevada. While denying the allegations of the complaint, we have also asserted counterclaims against Pinnacle and intend to vigorously defend the claims, all of which will be pursued through the arbitration proceedings. The arbitration was originally set to be heard on September 8, 2014, but the new dates set for the arbitration are April 27-29, 2015.

On October 24, 2013, we filed a lawsuit in the Second Judicial District Court for the State of Nevada (Golden Phoenix Minerals, Inc. vs. David A. Caldwell, Tom Klein, et al., case number CV 13-02332) alleging breaches by the defendants of various contracts and duties owed by the defendants to the Company, together with claims for fraud and breach of contract, conspiracy and other claims, relating primarily to the facts and circumstances surrounding the transaction we entered into with Pinnacle as discussed above, and related business and financial transactions among the parties. Mr. Caldwell is a former Chief Executive Officer and former member of the Board of Directors of the Company. Mr. Klein is a former Chief Executive Officer and a former member of the Board of Directors of the Company. We subsequently entered into a settlement agreement with Mr. Klein and have removed him from this case. We intend to vigorously prosecute the case involving Mr. Caldwell to protect our legal and property rights and interests. Answers and counterclaims have been filed by the remaining defendants, alleging breach of contracts and related claims, all of which have been denied by the Company. The Company has filed an answer to the counterclaim. Formal discovery has commenced, and a trial date has been set for September 28, 2015.

ITEM 4. MINE SAFETY DISCLOSURES

None.

PART II

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

Our common stock has been publicly traded since August 6, 1997. The securities are quoted on the OTC Bulletin Board under the symbol “GPXM.OB.” The following table sets forth for the periods indicated the range of high and low bid quotations per share as reported by the OTC Bulletin Board for our past two fiscal years. These quotations represent inter-dealer prices, without retail markups, markdowns or commissions and may not necessarily represent actual transactions.

Fiscal Year 2013	High		Low
First Quarter	$	0.0075	$	0.0045
Second Quarter	$	0.0089	$	0.0024
Third Quarter	$	0.0064	$	0.0035
Fourth Quarter	$	0.0050	$	0.0009

Fiscal Year 2014	High		Low
First Quarter	$	0.0080	$	0.0006
Second Quarter	$	0.0075	$	0.0020
Third Quarter	$	0.0050	$	0.0023
Fourth Quarter	$	0.0050	$	0.0012

Holders

On March 27, 2015, the closing price of our common stock as reported on the OTC Bulletin Board was $0.0022 per share. On March 27, 2015, we had approximately 301 holders of record of our common stock, 456,773,907 shares of our common stock were issued and outstanding, and an additional 19,650,000 shares issuable upon the exercise of outstanding options and warrants.

Dividend Policy

We have not paid any dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We intend to retain any earnings to finance the growth of the business. We cannot assure you that we will ever pay cash dividends. Whether we pay any cash dividends in the future will depend on the financial condition, results of operations and other factors that our Board of Directors (the “Board”) will consider.

Securities Authorized for Issuance under Equity Compensation Plans

On September 21, 2007, our shareholders approved the 2007 Equity Incentive Plan (the “2007 Plan”) providing 9% of the total number of our outstanding shares of common stock to be reserved and available for grant and issuance at the effective date of the 2007 Plan, with an increase at the beginning of each year if additional shares of common stock were issued in the preceding year so that the total number of shares reserved and available for grant and issuance, not including shares that are subject to outstanding awards, will be 9% of the total number of our outstanding shares of common stock on that date. No more than 2,000,000 shares of common stock shall be granted in the form of Incentive Stock Options. Under the 2007 Plan, grants may be made to any director, officer or employee of the Company or other person who, in the opinion of the Board, is rendering valuable services to the Company, including without limitation, an independent contractor, outside consultant, or advisor.

We have also issued stock options on a stand-alone basis under no specific plan, which have been approved by the Board.

The following table presents information concerning outstanding stock options and warrants issued by us as of December 31, 2014.

Equity Compensation Plan Information

Plan Category	Number of securities to be issued upon exercise of 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)) (c)

Equity compensation plans approved by security holders (1)		3,300,000	$	0.08		39,578,152
Equity compensation plans not approved by security holders (2)		19,650,000	$	0.043		N/A
Total:		22,950,000	$	0.05		39,578,152

____________

(1) Includes shares issuable upon exercise of stock options to employees, consultants and directors under the 2007 Plan.

(2) Includes 19,650,000 shares issuable upon exercise of warrants.

Recent Sales of Unregistered Securities

During the fourth quarter ended December 31, 2014, we did not have any sales of unregistered securities.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

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

Overview

We are a mineral exploration and development company, formed in Minnesota on June 2, 1997 and reincorporated in the State of Nevada in May 2008.

We have entered into an agreement to acquire an 80% interest in the Vanderbilt Silver and Gold Project, the Coyote Fault Gold and Silver Project, and claims that are an extension to the Coyote Fault property, all located adjacent to the producing Mineral Ridge property near Silver Peak, Nevada (the “Mhakari Properties”). In addition, we entered into an agreement to acquire the rights to 16 unpatented lode mining claims on BLM lands in Esmeralda County, Nevada, also located near the Mineral Ridge property (the “North Springs Properties”).

Going Concern Uncertainty

Our consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, we have a history of operating losses since our inception in 1997, and have an accumulated deficit of $60,626,496 and a total stockholders’ deficit of $1,379,437 at December 31, 2014. We currently have no operating revenues.

We have entered into options and agreements for the acquisition of our Nevada mineral properties. None of these mineral properties currently have reserves. We believe we will be required to raise significant additional capital to fund our operations and to complete the acquisition of the interests in and further the exploration, evaluation and development of our existing mineral properties and other prospects. There can be no assurance that we will be successful in raising the required capital at favorable rates or at all, or that any of these mineral properties will ultimately attain a successful level of operations. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws. These factors and our negative working capital position together raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a variety of estimates and assumptions that affect: (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 1 of the Notes to Consolidated Financial Statements, and several of these critical accounting policies are as follows:

Marketable Securities

Marketable securities consist of investments in common stock of two publicly held mining companies. The marketable securities are stated at market value, with market value based on market quotes. Unrealized gains and losses resulting from changes in market value are recorded as other comprehensive income, a component of stockholders’ equity in our consolidated balance sheet. Realized gains and losses resulting from the sale or disposition of marketable securities are reflected in net income or loss for the period. Estimated impairment losses that are determined to be other-than-temporary are included in net income or loss for the period.

Property and Equipment

Mine development costs are capitalized after proven and probable reserves have been identified. Amortization of mine development costs will be calculated using the units-of-production method over the expected life of the operation based on the estimated proven and probable reserves. As of December 31, 2014 and 2013, we had no mineral properties with proven or probable reserves and no amortizable mine development costs.

Mineral Property Acquisition Costs

Mineral property acquisition costs are recorded at cost and capitalized where an evaluation of market conditions and other factors imply the acquisition costs are recoverable. Such factors may include the existence or indication of economically mineable reserves, a market for the subsequent sale of the mineral property, the stage of exploration and evaluation of the property, historical exploration or production data, and the geographic location of the property. Once a determination has been made that a mineral property has proven or probable reserves that can be produced profitably, depletion of the capitalized acquisition costs will be computed at the commencement of commercial production on the units-of-production basis using estimated proven and probable reserves. As of December 31, 2014 and 2013, we had no capitalized mineral property acquisition costs.

Where an evaluation of market conditions and other factors results in uncertainty as to the recoverability of exploration mineral property acquisition costs, the costs are expensed as incurred and included in exploration and evaluation expenses.

Exploration and Evaluation Expenses

Exploration expenses relating to the search for resources suitable for commercial production, including researching and analyzing historic exploration data, conducting topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching and sampling are expensed as incurred.

Evaluation expenses relating to the determination of the technical feasibility and commercial viability of a mineral resource, including determining volume and grade of deposits, examining and testing extraction methods, metallurgical or treatment processes, surveying transportation and infrastructure requirements and conducting market and finance studies are expensed as incurred.

Mineral Property Development Costs

Mineral property development costs relate to establishing access to an identified mineral reserve and other preparations for commercial production, including infrastructure development, sinking shafts and underground drifts, permanent excavations, and advance removal of overburden and waste rock.

When it is determined that commercially recoverable reserves exist and a decision is made by management to develop the mineral property, mineral property development costs are capitalized and carried forward until production begins. The capitalized mineral property development costs are then amortized using the units-of-production method using proven and probable reserves as the mineral resource is mined.

Proven and Probable Ore Reserves

We currently have no proven or probable ore reserves.

On a periodic basis, if warranted based on our property portfolio and the stage of development of each property, management would review the reserves that reflect estimates of the quantities and grades of metals at our mineral properties which management believes can be recovered and sold at prices in excess of the total cost associated with mining and processing the mineralized material. Management’s calculations of proven and probable ore reserves would be based on, along with independent consultant evaluations, in-house engineering and geological estimates using current operating costs, metals prices and demand for the metals. Periodically, management may obtain external determinations of reserves.

Closure, Reclamation and Remediation Costs

Current laws and regulations require certain closure, reclamation and remediation work to be done on mineral properties as a result of exploration, development and operating activities. We periodically review the activities performed on our mineral properties and make estimates of closure, reclamation and remediation work that will need to be performed as required by those laws and regulations and make estimates of amounts that are expected to be incurred when the closure, reclamation and remediation work is expected to be performed. Future closure, reclamation and environmental related expenditures are difficult to estimate in many circumstances due to the early stages of investigation, uncertainties associated with defining the nature and extent of environmental contamination, the uncertainties relating to specific reclamation and remediation methods and costs, application and changing of environmental laws, regulations and interpretation by regulatory authorities, the country where the project is located, and the possible participation of other potentially responsible parties.

At December 31, 2014 and 2013, we had no mining projects that had advanced to the stage where closure, reclamation and remediation costs were required to be accrued.

Property Evaluations and Impairment of Long-Lived Assets

We review and evaluate the carrying amounts of our mineral properties, capitalized mineral property development costs and related buildings and equipment, and other long-lived assets when events or changes in circumstances indicate that the carrying amount may not be recoverable. Estimated future net cash flows, on an undiscounted basis, from a property or asset are calculated using estimated recoverable minerals (considering current proven and probable reserves and mineralization expected to be classified as reserves where applicable); estimated future mineral price realization (considering historical and current prices, price trends and related factors); operating, capital and reclamation costs; , and other factors beyond proven and probable reserves such as estimated market value for the property in an arms-length sale. Reduction in the carrying value of property, plant and equipment, or other long-lived assets, with a corresponding charge to earnings, are recorded to the extent that the estimated future net cash flows are less than the carrying value.

Estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in circumstances could occur which may affect the recoverability of our properties and long-lived assets.

Debt Issuance Costs

Costs incurred with the issuance of notes payable are capitalized and amortized to interest expense through the earlier of the maturity date or repayment of the notes payable.

Derivative for Conversion Feature

We estimate the fair value of the derivative for the conversion feature of our convertible debt using the Black-Scholes pricing model at the inception of the debt and at each reporting date, recording a derivative liability, debt discount and a gain or loss on derivative liability as applicable.

Fair Value of Financial Instruments

Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in our consolidated balance sheet, where it is practicable to estimate that value. As of December 31, 2014 and 2013, the amounts reported for cash, accrued liabilities, accrued interest payable, certain notes payable and amounts due to related party fair value because of their short maturities.

In accordance with Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures,” we measure certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·	Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Liabilities measured at fair value on a recurring basis are as follows at December 31, 2013:

	Total		Level 1		Level 2		Level 3

Derivative liability	$	136,765	$	-	$	-	$	136,765
Convertible notes payable		32,444		-		-		32,444

Total liabilities measured at fair value	$	169,209	$	-	$	-	$	169,209

We had no liabilities measured at fair value at December 31, 2014.

Revenue Recognition

Revenue from the sale of precious metals is recognized when title and risk of ownership passes to the buyer and the collection of sales proceeds is assured.

Revenue from the rental of drilling equipment is recognized when the agreed upon rental period is completed and the collection of rental proceeds is assured.

Income Taxes

We recognize a liability or asset for deferred tax consequences of all temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Deferred tax items mainly relate to net operating loss carry forwards and accrued expenses. These deferred tax assets or liabilities are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reviewed periodically for recoverability, and valuation allowances are provided when it is more likely than not that some or all of the deferred tax assets may not be realized. As of December 31, 2014 and 2013, we had fully reduced our net deferred tax assets by recording a 100% valuation allowance.

Stock-Based Compensation and Equity Transactions

In accordance with ASC Topic 718, Compensation – Stock Compensation, we measure the compensation cost of stock options and other stock-based awards issued to employees and directors pursuant to stock-based compensation plans at fair value at the grant date and recognize compensation expense over the requisite service period for awards expected to vest.

Except for transactions with employees and directors that are within the scope of ASC Topic 718, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Additionally, in accordance with ASC Topic 505-50, Equity-Based Payments to Non-Employees, we have determined that the dates used to value the transaction are either: (1) the date at which a commitment for performance by the counter party to earn the equity instruments is established; or (2) the date at which the counter party’s performance is complete.

Foreign Currency Transactions

At times, certain of our cash accounts may be deposited in a foreign bank. Gains and losses resulting from translation of such account balances are included in operating results, as are gains and losses from foreign currency transactions.

Comprehensive Income (Loss)

We present the components of other comprehensive income (loss) in a single continuous consolidated statement of comprehensive income (loss). For the year ended December 31, 2014, other comprehensive loss consists of unrealized losses on our marketable securities.

Earnings per Common Share

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during the period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the weighted average outstanding common stock equivalents which would arise from the exercise of stock options and warrants using the treasury stock method and the average market price per share during the period.

For the years ended December 31, 2014 and 2013, there were no common stock equivalents outstanding and, therefore, the computation of basic and diluted earnings per share were the same. At December 31, 2014, we had outstanding options and warrants to purchase a total of 22,950,000 common shares that could have a future dilutive effect on the calculation of earnings per share.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the financial statement distinction between development stage entities and other reporting entities from U.S. generally accepted accounting principles (“GAAP”). In addition, the amendments eliminate the requirements for development stage entities to: (1) present inception-to-date information in the statements of income, cash flows and shareholder equity; (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. The Company adopted the provisions of ASU No. 2014-10 during its third fiscal quarter ended September 30, 2014, with no impact on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 310-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has not determined the impact of the future adoption of the provisions of ASU No. 2014-15 on its consolidated financial statements.

RESULTS OF OPERATIONS

Revenues

During the year ended December 31, 2013 we completed the sale of the equipment from our drilling division, and we had no operating revenues during the years ended December 31, 2014 and 2013. We anticipate that we will have no more revenues from this source.

Operating Costs and Expenses

Because of our lack of funding in 2013 and into 2014, we have significantly reduced the level of our operating costs and expenses.

During the years ended December 31, 2014 and 2013, our exploration and evaluation expenses were $216,629 and $156,212, respectively. The increase in exploration and evaluation expenses in the current year resulted from technical evaluation and other activities in process on our Nevada properties. Also included for both years are the expenses required by the option and acquisition agreements for our Nevada properties.

Our exploration projects currently do not have reserves. The Mhakari and North Springs Properties in Nevada are currently our only mineral properties. More detailed explanations of these mineral properties are provided in Item 2. Properties.

General and administrative expenses were $585,964 and $513,910 for the years ended December 31, 2014 and 2013, respectively. These expenses include investor relations, consulting fees for our officers and directors, legal and professional fees, other outside consulting fees, travel and stock-based compensation expense. The increase in our general and administrative expenses in the current year is due primarily to increased fees paid to our officers and directors and ongoing legal expenses.

Depreciation and amortization expense is not currently material to our consolidated financial statements and was $912 and $5,387 for the years ended December 31, 2014 and 2013, respectively. The decrease in depreciation and amortization expense in the current year resulted from the sale and disposal of office furniture and equipment and drilling equipment in 2013.

Other Income (Expense)

Interest and other income currently are not material to our consolidated financial statements, and totaled $657 and $48 for the years ended December 31, 2014 and 2013, respectively.

Interest expense was $45,932 and $89,852 for the years ended December 31, 2014 and 2013, respectively. The decrease in interest expense was due primarily to the repayment in full of convertible notes payable to an institutional investor during the first three months of the current year. We also repaid the interest-bearing amount due related party during the current year.

We reported a loss on derivative liability of $445,881 and $57,794 for the years ended December 31, 2014 and 2013, respectively, related to convertible notes payable to an institutional investor entered into in 2013. We estimated the fair value of the derivative for the conversion feature of the notes at the inception of each note and at each subsequent report date or date of conversion or payment using the Black-Scholes pricing model, resulting in a gain or loss on derivative liability. As discussed above, we repaid the convertible notes payable during the first three months of the current year.

We reported a foreign currency loss of $1,375 for the year ended December 31, 2014 and a foreign currency gain of $16,935 for the year ended December 31, 2013. The amount of the foreign currency gain or loss will fluctuate from period to period depending on the balance maintained in foreign bank accounts, our foreign investments, and changes in foreign exchange rates.

We reported a gain on extinguishment of debt of $817,608 and $101,824 for the years ended December 31, 2014 and 2013, respectively. A significant portion of the gain in the current year resulted from the repayment of convertible debt or the conversion of convertible debt into shares of our common stock where related derivative liabilities were extinguished. We have also had favorable results from efforts to settle outstanding obligations.

We reported a gain on disposition of assets of $2,515,654 for the year ended December 31, 2014, resulting from the sale of our 10% interest in in the Santa Rosa Gold Mine, net of certain fees and expenses, and from the sale of certain marketable securities and a net smelter royalty interest. We reported a loss on disposition of assets of $58,009 for the year ended December 31, 2013 resulting from the sale and disposition of office furniture and equipment and drilling equipment.

Net Income (Loss)

As a result, we reported net income of $2,037,226 for the year ended December 31, 2014 and net loss of $762,357 for the year ended December 31, 2013.

LIQUIDITY AND CAPITAL RESOURCES

We have a history of operating losses since our inception in 1997, and had an accumulated deficit of $60,626,496 and a total stockholders’ deficit of $1,379,437 at December 31, 2014. At December 13, 2014, we had current assets of $911,980 and current liabilities of $2,291,493, resulting in a working capital deficit of $1,379,513. Included in current assets at December 31, 2014 was cash of $642,990, substantially all of which is deposited in a corporate savings account.

We have entered into options and agreements for the acquisition and development of our mineral properties that will require significant funds and require us to raise additional capital to complete the acquisitions and to fund the required exploration, evaluation and development costs and expenditures. There can be no assurance that we will be successful in raising the required capital or that any of these mineral properties will ultimately attain a successful level of operations. None of our mineral properties currently have proven or probable reserves. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws.

Notes Payable

We have two notes payable totaling $913,223 to Sala-Valc S.A.C., a Peruvian corporation (“SV”), resulting from an Amendment to Mining Asset Purchase and Strategic Alliance Agreement related to mineral properties in Peru.

In addition, we have two notes payable totaling $440,000 to Pinnacle Minerals Corporation (“Pinnacle”) resulting from an Amendment to Membership Interest Purchase Agreement whereby we purchased Pinnacle’s membership interest in Molyco, LLC, which owns or controls portions of mineral properties in Peru. Pinnacle has initiated legal action related to these unpaid obligations.

The parties involved in the mineral property projects in Peru were not able to finalize the transfer agreements to be filed with Peruvian governmental authorities to affect the transfer to us of the mineral properties in Peru. Therefore, we have discontinued our efforts in Peru and contend nothing further is payable by us under these promissory notes. The ultimate disposition of the convertible notes payable to SV and the notes payable to Pinnacle is dependent on the resolution of related legal actions described elsewhere in this report. We are currently unable to predict the ultimate outcome of these matters.

Net Cash Provided By or Used In Operating, Investing and Financing Activities

During the year ended December 31, 2014, net cash used in operating activities was $1,558,448 as a result of our net income of $2,037,226 and total non-cash expenses of $524,009, offset by total non-cash gains of $3,333,262, increase in prepaid expenses and other current assets of $10,476, increase in deposits of $190,000, and decreases in accounts payable of $477,912 and accrued liabilities of $108,033.

During the year ended December 31, 2013, we used net cash of $362,944 in operating activities as a result of our net loss of $762,357, non-cash gain of $101,824, and decrease in accrued liabilities of $10,367, partially offset by non-cash expenses totaling $179,040, decrease in prepaid expenses and other current assets of $7,239, and increases in accounts payable of $294,325 and deposits of $31,000.

During the year ended December 31, 2014, we had net cash provided by investing activities of $2,360,654, consisting primarily of proceeds from the sale of our 10% ownership interest in the Santa Rosa, Panama gold project partially offset by the purchase of marketable securities of $124,000. During the year ended December 31, 2013, we had net cash provided by investing activities of $8,000, consisting of proceeds from the disposal of assets.

During the year ended December 31, 2014, net cash used in financing activities was $164,141, comprised of payments of notes payable of $59,075 and payment of amount due to related party of $115,066, partially offset by proceeds from the issuance of common stock of $10,000.

During the year ended December 31, 2013, net cash provided by financing activities was $72,165, comprised of proceeds from the issuance of notes payable of $101,575, partially offset by payment of debt issuance costs of $9,000 and payments of notes payable of $20,410.

Off-Balance Sheet Arrangements

As of December 31, 2014, we had no material off-balance sheet arrangements.

ITEM 7A. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements appear beginning at page F-1.

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

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2014. Based on that evaluation, our chief executive officer and chief financial officer concluded that the disclosure controls and procedures employed at the Company were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined under Exchange Act Rules 13a-15(f). The Company’s internal control system is designed to provide reasonable assurance to its management and board of directors regarding the preparation and fair presentation of published financial statements. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under that framework, our management concluded that our internal control over financial reporting was not effective as of December 31, 2014.

Due to lack of funding, we significantly scaled back our operations, including eliminating certain employees with accounting and administrative responsibilities. As a result, at December 31, 2014 we no longer had sufficient segregation of accounting and financial reporting duties. We consider this to be a material weakness in our internal control over financial reporting.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. The Company’s internal control over financial reporting was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. 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.

Changes in Internal Control Over Financial Reporting

Other than the lack of segregation of duties described above, there was no change in our internal control over financial reporting during the fiscal quarter ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the names and ages of our current directors and executive officers, and the principal offices and positions with us held by each person. Our executive officers are appointed by our Board of Directors. Our directors serve until the earlier occurrence of the appointment of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors. There are no family relationships among our directors and executive officers.

Name	Age	Position

Donald B. Gunn	63	President, Chairman of the Board, Director
John Di Girolamo	39	Director, Chair of the Audit and Nominating Committees
Jeffrey Dahl	38	Director
Dennis P. Gauger	63	Chief Financial Officer, Corporate Secretary, Director

Biographies

Donald B. Gunn. Mr. Gunn was appointed to our Board of Directors on September 18, 2010 and President, effective March 15, 2011. He was elected by our Board of Directors to serve as Chairman of the Board, effective March 4, 2013. Mr. Gunn currently serves as a member and chairman of our Interim Governing Board, formed in June 2012 to address certain legal matters and to identify and advance the next steps for the development of our portfolio of mining projects. Mr. Gunn’s business expertise is recurring revenue streams. He brings nearly three decades of business, financial and entrepreneurial experience to the Company. His private interests include investing and commodity trading, assisting small business start-ups and analysis of gold and silver markets. Mr. Gunn served as the Vice President of Engineering and as a Director for Media Sciences International, Inc., an SEC reporting company in the color business printer industry, from December 1999 through 2007. He founded ultraHue, Inc., a manufacturer of ink and toner products for computer printers in March 1996, where he served as President and Chief Executive Officer until it was acquired by Media Sciences in December 1999. Mr. Gunn is currently part owner of PinPoint LLC, a private manufacturer of supplies for the postage meter market, where he also handles the design of new products and the sourcing of products from China and Taiwan. He received a Bachelor’s of Science degree in Electrical Engineering from the University of Illinois in 1974. Mr. Gunn has been a stockholder and involved with the Company for several years.

John Di Girolamo. John Di Girolamo was appointed to our Board of Directors on October 20, 2011. He currently serves as a member and chairman of our Board’s Audit, Nominating and Oversight/Compensation Committees and as a member of our Interim Governing Board. Mr. Di Girolamo has over fifteen years of financial and mining experience. He has participated in capital raises in excess of $200 million and has financed junior mining and energy companies throughout North America. He has chaired seminars in partnership with other organizations, including the TSX, educating others on how to take companies in the mining sector public. Mr. Di Girolamo's background includes serving as President of Investment Banking for Euroglobal Capital Partners Inc. where he structured going-public transactions, financings, and helped consult with both private and public companies on various exchanges. He was an Investment Advisor for Pope & Company where he was directly responsible for the creation or sourcing of public listings, and the Reverse Take Over (RTO) of private companies with these entities. He is experienced in rehabilitating legacy assets some of which have achieved production within six months of acquisition.

Jeffrey Dahl. Jeffrey Dahl was appointed to our Board of Directors on April 28, 2012. He currently serves as a member of our Interim Governing Board. Mr. Dahl has an extensive client base that includes corporations, financial institutions, financial sponsors, family offices, insurance/pension funds, sovereign wealth funds, hedge funds, and private equity groups. Formerly, Mr. Dahl has worked with Goldman Sachs & Co. in a partnership setting whereby he was responsible for introducing high-valued targets to the Special Situations division and Eastdil Secured (subsidiary of Wells Fargo & Co.) whereby he was dedicated to the sale of all major real estate product types including office, retail, hospitality, industrial, land, and multifamily properties. Mr. Dahl has extensive experience in counseling and directing corporate mergers, acquisitions, restructurings, leveraged buyouts, raising capital, and investing. He was responsible for directing projects and providing financial advisory services to the companies that make up the investment banking client base for MS Capital (a middle-market boutique investment bank). Services included M&A advisory, lender communications, valuation, and raising capital. Specifically, Mr. Dahl helped companies develop and implement strategic plans for competitive advantage by identifying their highest-value opportunities, address critical challenges, and transform their businesses. Recently, Mr. Dahl has accepted the President’s position of a former client, Airdex International, Inc. (a new technology shipping pallet Company), whereby he plans to oversee operations and aid in identifying and implementing a strategic plan to grow the business.

Dennis P. Gauger. Dennis P. Gauger, CPA, is a licensed Certified Public Accountant in Utah and Nevada. He previously served as part-time, contract Chief Financial Officer of Golden Phoenix from January 2004 to January 2008, and has served the Company as an independent accounting and compliance consultant from January 2008 to his current appointment in January 2013 as Chief Financial Officer and Secretary of the Company. On May 24, 2013 Mr. Gauger was appointed as a member of our Board of Directors. From May 2007 through December 2012, Mr. Gauger served as Chief Financial Officer and Corporate Secretary for BSD Medical Corporation, a publicly held medical device company. He also has served several publicly held companies as a part-time, contract chief financial officer, including the following: from January 2014 until the present, Mr. Gauger has served as Chief Financial Officer for One World Holdings, Inc., a publicly held toy sales and distribution company; from April 2004 until November 2008, Mr. Gauger served as Chief Financial Officer for Cimetrix Incorporated, a publicly held software company; from January 2004 until January 2008, Mr. Gauger served as a director, Chief Financial Officer, and Secretary for Groen Brothers Aviation, Inc., a publicly held aviation company; and from November 2001 until March 2007, Mr. Gauger served as Chief Financial Officer for Nevada Chemicals, Inc., a publicly held chemical supply company to the gold mining industry. Additionally, over the past seventeen years, he has served several public and private companies in a variety of industries as a part-time, contract financial executive and financial consultant. Previously, Mr. Gauger worked for 22 years for Deloitte & Touche LLP, an international accounting and consulting firm, including 9 years as an accounting and auditing partner. He is a member of the American Institute of Certified Public Accountants and the Utah Association of Certified Public Accountants.

Committees of the Board of Directors

Our Board of Directors has set up four committees. The following is a list of committees and their composition that are presently active.

Committee	Chairperson	Members

Interim Governing Board	Donald Gunn	Donald Gunn, John Di Girolamo, Jeffrey Dahl
Audit Committee	John Di Girolamo	John Di Girolamo, Dennis Gauger
Nominating Committee	John Di Girolamo	John Di Girolamo
Oversight/Compensation Committee	John Di Girolamo	John Di Girolamo

Further discussion regarding each of the committees of the Board can be found below under the heading, “Meetings and Committees of the Board of Directors.”

Resignations from the Board of Directors

Nominations to the Board of Directors

Our directors take a critical role in guiding our strategic direction and oversee the management of the Company. Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the stockholders and personal integrity and judgment. In addition, directors must have time available to devote to Board activities and to enhance their knowledge of the growing industry. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.

Our Board formally created a Nominating Committee and adopted a Nominating Committee Charter. Currently Mr. Di Girolamo serves as the sold member of the Nominating Committee. In carrying out its responsibilities, the Nominating Committee will consider candidates suggested by stockholders. If a stockholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of our Bylaws. According to our Bylaws, nominations of persons for election to the Board may be made by any stockholder of the Company, entitled to vote for the election of directors at a meeting, who complies with the following notice procedures. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the secretary of the corporation. To be timely, a stockholder’s notice must be delivered or mailed to and received at the registered office of the corporation not less than 30 days prior to the date of the meeting; provided, in the event that less than 40 days’ notice of the date of the meeting is given or made to stockholders, to be timely, a stockholder’s notice must be received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed. Such stockholder’s notice shall set forth (a) as to each person whom such stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including each such person’s written consent to serve as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address of such stockholder as it appears on the corporation’s books, and (ii) the class and number of shares of the corporation’s capital stock that are beneficially owned by such stockholder.

Proposals for candidates to be evaluated by the Board must be sent to the President at our corporate office, 125 East Main Street, Suite 602, American Fork, Utah 84003.

Stockholders may send communications to the Board by mail to the President, Golden Phoenix Minerals, Inc., 125 East Main Street, Suite 602, American Fork, Utah 84003.

Board Leadership Structure and Role in Risk Oversight

The Board does not have a policy with respect to whether the same person should serve as both the chief executive officer and chairman of the board or, if the roles are separate, whether the chairman should be selected from the non-employee directors or should be an employee. The Board believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for the Company at that time.

As described previously, the positions of President and Chairman of the Board are vested in one individual, Donald Gunn. In addition, our Interim Governing Board, formed in June 2012, is comprised of three members of our Board of Directors including Mr. Gunn, and addresses certain legal matters and the development of our portfolio of mining projects. Based on factors such as the experience level of these individuals, the Company’s size and the current business environment, we believe that, at this time, separating the positions of Chairman of the Board and President is not critical to the best interests of the Company.

Risk Oversight

In its oversight role, the Board of Directors annually reviews the Company’s strategic plan, which addresses, among other things, the risks and opportunities facing the Company. The Board also has overall responsibility for executive officer succession planning and reviews succession planning efforts each year. The Board oversees risk management as a whole but also delegates certain risk management oversight responsibility to the Interim Governing Board and Board committees in certain instances. As part of its responsibilities as set forth in its charter, the Audit Committee is responsible for discussing with management the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures, including the Company’s risk assessment and risk management policies. In this regard, the Company’s audit committee chairman prepares annually a comprehensive risk assessment report and reviews that report with the Audit Committee each year. The Company’s management regularly evaluates controls and procedures, and reports to the Board regarding their design and effectiveness.

Audit Committee Financial Expert

We have established a separate Audit Committee within the meaning of Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). One independent director currently serves on our Audit Committee: Mr. Di Girolamo (Audit Committee Chairman). Mr. Gauger, our Chief Financial Officer and a member of our Board of Directors, also serves on the Audit Committee. We believe Mr. Di Girolamo, Audit Committee Chairman, is an “audit committee financial expert,” within the meaning of Item 407(d)(5) of Regulation S-K.

Audit Committee Report

The Audit Committee reviews the Company’s internal accounting procedures, consults with and reviews the services provided by the Company’s independent accountants and makes recommendations to the Board of Directors regarding the selection of independent accountants. In fulfilling its oversight responsibilities, the Committee has reviewed and discussed the audited financial statements with management and discussed with the independent auditors the matters required to be discussed by SAS 61. Management is responsible for the financial statements and the reporting process, including the system of internal controls. The independent auditors are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles.

The Audit Committee discussed with the independent auditors, the auditors’ independence from the management of the Company and received written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1.

After review and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Audit Committee also recommended to the Board that HJ & Associates, LLC be appointed as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2015.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires our officers and directors and persons who own more than 10% of a registered class of our securities to file reports of change of ownership with the SEC. Officers, directors and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all 16(a) forms they file.

Based solely on our review of the copies of such forms that we received, or written representations from certain reporting persons that no forms were required for those persons, we believe that during fiscal year 2014 all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were not complied with by such persons in a timely manner, including Forms 4 filed by Messrs. Gunn, Di Girolamo and Dahl.

Involvement in Certain Legal Proceedings

We are not aware that any director or executive officer or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 5 years.

Code of Ethics

We have adopted a code of ethics, which is available at our website at www.goldenphoenix.us.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation

During fiscal year 2014, the Compensation Committee of the Board of Directors reviewed and approved executive compensation policies and practices. Our executive compensation philosophy and the elements of our executive compensation program in fiscal 2014 are summarized as follows:

·	The main objectives of our executive compensation program are attracting, motivating and retaining the best executives and aligning their interests with our strategy of maximizing shareholder value.

·	During fiscal 2014, total direct compensation under our executive compensation program consisted of consulting fees generally determined by independent contractor agreements and long-term equity incentive opportunities. However, due to financial difficulties in 2013 and 2012, significant portions of executive compensation obligations were deferred or eliminated and partially paid in 2014. There were no bonus opportunities in fiscal year 2014.

·	The Compensation Committee is responsible for evaluating and setting the compensation levels of our executive officers. In setting compensation levels for executive officers other than the Chief Executive Officer, the Compensation Committee solicits the input and recommendations of our Chief Executive Officer, Donald Gunn.

·	The Compensation Committee did not engage outside consultants in determining fiscal year 2014 executive compensation.

·	The Compensation Committee considers all relevant competitive factors in determining compensation for our executive officers.

The following table sets forth information regarding all forms of compensation received by the Named Executive Officers during the fiscal years ended December 31, 2014, 2013 and 2012. Director compensation for these individuals is provided elsewhere.

Name and Principal Position	Year	Salary		Bonus		Option Awards(1)		All Other Compensation		Total
(a)	(b)	(c)		(d)		(e)		(i)		(j)

Donald B. Gunn (2)	2014	$	-	$	-	$	-	$	96,000	$	96,000
President	2013		-		-		-		72,000		72,000
	2012		-		-		-		60,000		60,000

Dennis P. Gauger (3)	2014		-		-		-		52,000		52,000
Chief Financial Officer	2013		-		-		2,284		55,369		57,653
	2012		-		-		-		60,100		60,100

(1)

The amounts shown in column (e) reflect the aggregate grant date fair value with respect to employee stock options granted to the Named Executive Officers during the respective fiscal years in accordance with ASC Topic 718. The stock options awarded in fiscal years 2013 vested 100% upon grant and have a five-year term. Assumptions used in calculating the amounts are included in the notes to the Company’s consolidated financial statements included in our Annual Report on Form 10-K for the respective year. No stock options were awarded to the Named Executive Officers during fiscal years 2014 and 2012.

(2)

Mr. Gunn was appointed President in March 2011. The amounts in column (i) reflect the amounts incurred to Mr. Gunn as a contract executive.

(3)

Mr. Gauger was appointed Chief Financial Officer and Secretary of the Company in January 2013. The amounts in column (i) reflect the amounts incurred to to Mr. Gauger as an independent accounting and compliance consultant or contract executive.

Employment and Consulting Agreements of Executive Officers and Directors

Donald B. Gunn

On December 7, 2011, we entered into a Consulting Agreement (the “Gunn Consulting Agreement) with Donald Gunn, whereby Mr. Gunn is to provide services to the Company in his role as President of the Company. Mr. Gunn was appointed President of the Company effective March 15, 2011. Pursuant to the Gunn Consulting Agreement, the Company has accrued monthly compensation to Mr. Gunn of $3,000 from July through November 2011 and $6,000 from December 31, 2011 to May 2014 when monthly compensation was increased to $9,000. During the year ended December 31, 2014, Mr. Gunn was paid a total of $187,000 for current and past compensation. As of December 31, 2014, unpaid compensation payable to Mr. Gunn totaled $56,000.

Dennis P. Gauger

On January 15, 2013, the Board of Directors appointed Dennis P. Gauger as our Chief Financial Officer and Corporate Secretary. Pursuant to an Independent Contractor Agreement, Mr. Gauger was to perform the agreed upon duties for a period of one year and be paid $5,000 per month through June 2013 and $7,500 per month for the remainder of the contract. Effective September 1, 2013, Mr. Gauger’s compensation was reduced to $3,000 per month and, effective May 1, 2014, Mr. Gauger’s compensation was increased to $5,000 per month. During the year ended December 31, 2014, Mr. Gauger was paid a total of $64,000 for current and past compensation. As of December 31, 2014, there was no unpaid compensation payable to Mr. Gauger.

From January 2008 to his appointment in January 2013 as Chief Financial Officer, Mr. Gauger served the Company as an independent accounting and compliance consultant.

Stock Option Plans

On October 23, 2006, the Board approved the 2006 Non-Employee Director Stock Option Plan providing for 2,000,000 shares of the Company’s common stock to be reserved for issuance of awards of non-qualified stock options to non-employee directors of the Company pursuant to the terms and conditions set forth in the plan.

On September 21, 2007, stockholders of the Company approved the 2007 Equity Incentive Plan providing for 9% of the total number of outstanding shares of the Company’s common stock at the beginning of each fiscal year to be available for issuance of awards of Incentive and Nonqualified Stock Options, Stock and Stock Appreciation Rights. However, not more than 2,000,000 shares of stock shall be granted in the form of Incentive Stock Options. On July 15, 2008, 10,000,000 shares underlying the options under this 2007 Equity Incentive Plan were registered with the U.S. Securities and Exchange Commission.

We have also issued stock options on a stand-alone basis under no specific plan, which have been approved by the Board.

Outstanding Equity Awards at December 31, 2014 Year-End

The following table provides information on the year-end 2014 holdings of Company stock options by the Named Executive Officers.

Name	Number of Securities Underlying Unexercised Options (#)		Equity Incentive Plan Award: Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options (#) Exercisable		Option Exercise Price ($)		Option Expiration Date
(a)	(b)		(c)		(d)		(e)		(f)

Donald B. Gunn		100,000		-		100,000		0.04	09/20/2015
Donald B. Gunn		500,000		-		500,000		0.10	12/22/2016
Dennis P. Gauger		300,000		-		300,000		0.10	12/22/2016
Dennis P. Gauger		500,000		-		500,000		0.0042	05/24/2018
Dennis P. Gauger		100,000		-		100,000		0.0042	05/24/2018

Columns (g) through (j) have been omitted since the Company has not granted any stock awards.

Grants of Plan-Based Awards – Fiscal Year 2014

During fiscal year 2014, we did not grant any plan-based awards to the Company’s Named Executive Officers.

Option Exercises and Stock Vested for Fiscal Year 2014

The Named Executive Officers did not exercise any stock options in fiscal year 2014.

Potential Payments Upon Termination

As of December 31, 2014, we did not have any agreement with any of our Named Executive Officers to pay them severance or other benefits following termination of their compensation agreements.

Compensation of Directors

Our Board has adopted a stipend system to compensate our directors, whereby each director receives $1,000 per month. Also, during the year ended December 31, 2011, our Board approved a supplemental fee of $500 per committee meeting for all non-executive directors participating as a member of a committee of the Board. Further, reasonable expenses related to the performance of duties as a director are reimbursed upon submission of evidence of payment therefore. In addition, our directors are generally granted a stock option for 100,000 shares upon appointment to the Board. These options vest 100% upon grant, are exercisable for a period of five years and have an exercise price equal to the market price of the Company’s common stock on the date of the option grant.

Effective May 1, 2014, the Board of Directors of the Company approved the following monthly compensation levels for members of our Interim Governing Board (“IGB”): Donald Gunn $9,000 and John Di Girolamo and Jeffrey Dahl $7,000. The three members of the IGB each also received 500,000 restricted shares of common stock of the Company. The monthly compensation for Mr. Gunn is included in the discussion of compensation of Named Executive Officers above.

The following table sets forth compensation earned by our directors for the fiscal year ended December 31, 2014.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)		Option Awards ($)(2)		All Other Compensation ($)(3)		Total ($)
(a)	(b)		(c)		(d)		(g)		(h)

Donald B. Gunn		12,000		1,750		-		-		13,750
John Di Girolamo		12,000		1,750		-		56,000		69,750
Jeffrey Dahl		12,000		1,750		-		56,000		69,750
Dennis P. Gauger		12,000		-		-		-		12,000
Thomas J. Klein (4)		8,000		-		-		-		8,000

(1)	The amounts shown in column (c) reflect the aggregate grant date fair value of 500,000 common shares issued to each of Messrs. Gunn, Di Girolamo and Dahl for services rendered as members of the IGB.
(2)	The amounts shown in column (d) reflect the aggregate grant date fair value with respect to director stock options granted in accordance with ASC Topic 718. No stock options were awarded in fiscal year 2014.
(3)	The amounts shown in column (g) include monthly compensation paid to Messrs. Di Girolamo and Dahl for services rendered as members of the IGB.
(4)	Effective August 20, 2014, Thomas Klein resigned from the Company’s Board of Directors.

As of December 31, 2014, unpaid compensation payable to Mr. Di Girolamo totaled $12,500. As of December 31, 2014, there were no unpaid directors fees payable to Messrs. Gunn, Dahl, Gauger and Klein.

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

The following table sets forth information known to us with respect to beneficial ownership of our Common Stock as of March 27, 2015 for (i) our Named Executive Officers, (ii) each of our directors, (iii) each holder of 5.0% or greater of our Common Stock, and (iv) all executive officers and directors as a group. 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 subject to options that are exercisable within 60 days following March 27, 2015 are deemed to be outstanding and beneficially owned by the optionee or group of optionees for the purpose of computing share and percentage ownership of that optionee or group of optionees, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated by footnote, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown beneficially owned by them. The inclusion of any shares as beneficially owned does not constitute an admission of beneficial ownership of those shares. The percentage calculation of beneficial ownership is based on 443,273,907 shares of Common Stock outstanding as of March 27, 2015. Except as otherwise noted, the address of each person listed on the following table is 125 East Main Street, Suite 602, American Fork, Utah 84043.

	Common Stock Beneficially Owned
Name of Beneficial Owner	Shares		Percent

Officers and Directors
Donald B. Gunn (1)		7,915,500		1.73	%
Dennis P. Gauger (2)		918,000		*
John Di Girolamo (3)		1,000,000		*
Jeffrey Dahl (4)		6,800,000		1.49	%

All Executive Officers and Directors as a Group (4 persons) (5)		16,633,500		3.62	%

* Less than 1%

(1)	Includes 600,000 shares subject to stock options that are currently exercisable or exercisable within 60 days after March 27, 2015.
(2)	Includes 900,000 shares subject to stock options that are currently exercisable or exercisable within 60 days after March 27, 2015.
(3)	Includes 500,000 shares subject to stock options that are currently exercisable or exercisable within 60 days after March 27, 2015.
(4)	Includes 100,000 shares subject to stock options that are currently exercisable or exercisable within 60 days after March 27, 20154.
(5)	Includes a total of 2,100,000 shares subject to stock options that are currently exercisable or exercisable within 60 days after March 27, 2015.

Equity Compensation Plans

For information regarding our equity compensation plans, please see Item 5, above.

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

Amounts Due to Related Party

Amounts due to related party at December 31, 2013 of $136,765 consisted of a note due to Robert P. Martin, former Chairman of our Board of Directors, resulting from a debt settlement agreement entered into in April 2010. The repayment terms of the note were restructured as part of a consulting agreement entered into with Mr. Martin effective September 1, 2011. During the year ended December 31, 2014, we repaid or otherwise settled all amounts due Mr. Martin, including the note principal and related accrued interest payable.

Consulting and Employment Agreements

As further discussed in the Notes to Consolidated Financial Statements and in Item 11 above, we have entered into consulting and employment agreements with certain of our officers and directors.

Accounts Payable to Related Parties

As of December 31, 2014, our accounts payable included amounts due to officers and directors and former officers and directors for unpaid compensation, directors’ fees and expense reimbursements totaling $134,750. Of this amount, $68,500 was paid subsequent to December 31, 2014.

Director Independence

Our Board of Directors consists of one independent director, as determined by former Rule 4200 of the National Association of Securities Dealers’ (NASD) listing standards. A Director is considered independent if the Board affirmatively determines that the Director (or an immediate family member) does not have any direct or indirect material relationship with us or our affiliates or any member of our senior management or his or her affiliates. The term “affiliate” means any corporation or other entity that controls, is controlled by, or under common control with us, evidenced by the power to elect a majority of the Board of Directors or comparable governing body of such entity. The term “immediate family member” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in law, brothers- and sisters-in-laws and anyone (other than domestic employees) sharing the Director’s home.

In accordance with these guidelines, the Board has determined that current Board member John Di Girolamo is an independent director.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Relationship with Independent Registered Public Accounting Firm

Our Audit Committee has responsibility for the appointment, compensation and oversight of the work of our independent registered public accounting firm, HJ & Associates, LLC. We retained the firm of HJ & Associates, LLC as our Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2014. We have appointed HJ & Associates, LLC as our independent registered public accounting firm for our fiscal year 2015.

Audit Fees

For the fiscal years ended December 31, 2014 and 2013, the aggregate fees billed for services rendered for the audits of our annual consolidated financial statements and the review of the consolidated financial statements included in our quarterly reports on Form 10-Q and the services provided in connection with the statutory and regulatory filings or engagements for those fiscal years and registration statements filed with the SEC were $24,400 and $38,700, respectively.

Audit-Related Fees

For the fiscal years ended December 31, 2014 and 2013, there were no fees billed for the audit or review of the financial statements that are not reported above under Audit Fees.

Tax Fees

For the fiscal years ended December 31, 2014 and 2013, the aggregate fees billed for tax compliance services were $2,600 and $4,830, respectively. There was no tax-planning advice provided in 2014 or 2013.

All Other Fees

For the fiscal years ended December 31, 2014 and 2013, there were no fees billed for services other than services described above.

Audit Committee Approval of Audit and Non-Audit Services of Independent Accountants

The Audit Committee approves all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. The independent accountants and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent accountants, and the fees for the services performed to date.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

The following Exhibits are filed or incorporated herein by reference as part of this Annual Report.

Exhibit No.	Description

3.1	Articles of Incorporation of Golden Phoenix Minerals, Inc.(1)

3.2	Bylaws of Golden Phoenix Minerals, Inc.(1)

3.3	Amended and Restated Articles of Incorporation of Golden Phoenix, Minerals, Inc.(2)

3.4	Amended and Restated Articles of Incorporation of Golden Phoenix Minerals, Inc.(3)

3.5	Certificate of Amendment to Articles of Incorporation of Golden Phoenix Minerals, Inc. (5)

3.6	Amended and Restated Bylaws of Golden Phoenix Minerals, Inc.(3)

4.1	Specimen Common Stock Certificate of Golden Phoenix Minerals, Inc.(3)

4.2	Form of Warrant of Golden Phoenix Minerals, Inc.(4)

4.3	Form of Warrant of Golden Phoenix Minerals, Inc. – Lincoln Park Capital private placement, February 29, 2012 (6)

10.1	Independent Contractor Agreement between the Company and Dennis P. Gauger dated January 17, 2013 (7)

10.2	Amended and Restated Option Agreement between the Company and Mhakari Gold (Nevada) Inc. dated February 26, 2013 (7)

10.3	North Springs Property Exploration and Mining Lease with Options to Purchase Agreement between the Company and Mountain Gold Claims, LLC Series 15 and Lane A. Griffin dated June 17, 2013 (8)

23.1	Consent of Independent Registered Accounting Firm*

31.1	Certification of Principal Executive Officer Pursuant to Section 302*

31.2	Certification of Chief Financial Officer Pursuant to Section 302*

32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350*

101.INS	XBRL Instance**

101.SCH	XBRL Schema**

101.CAL	XBRL Calculations**

101.DEF	XBRL Definitions**

101.LAB	XBRL Label**

101.PRE	XBRL Presentation**

*Filed herewith.

** The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

(1)	Incorporated by reference from Form 10SB12G filed with the SEC on July 30, 1997.
(2)	Incorporated by reference from Form SB-2/A filed with the SEC on June 29, 2007.
(3)	Incorporated by reference from Form 8-K filed with the SEC on June 5, 2008.
(4)	Incorporated by reference from Exhibit A to Exhibit 10.1 of Form 8-K filed with the SEC on April 25, 2007.
(5)	Incorporated by reference from Form 8-K filed with the SEC on December 8, 2010.
(6)	Incorporated by reference from Form 8-K filed with the SEC on March 7, 2012.
(7)	Incorporated by reference from Form 10-Q filed with the SEC on May 15, 2013
(8)	Incorporated by reference from Form 10-K filed with the SEC on April 14, 2014

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.

	GOLDEN PHOENIX MINERALS, INC.

Date: March 30, 2015	By:	/s/ Donald B. Gunn
		Name: Donald B. Gunn
		Title: President and Chair of Interim Governing Board
		(Principal Executive Officer)


Date: March 30, 2015	By:	/s/ Dennis P. Gauger
		Name: Dennis P. Gauger
		Title: Chief Financial Officer
		(Principal Accounting and Financial Officer)

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.

SIGNATURE	TITLE	DATE

/s/ Donald B. Gunn
Donald B. Gunn	President, Chair of Interim Governing Board and Director	March 30, 2015

/s/ Dennis P. Gauger
Dennis P. Gauger	Chief Financial Officer and Director	March 30, 2015

/s/John Di Girolamo
John Di Girolamo	Director	March 30, 2015

/s/ Jeffrey Dahl
Jeffrey Dahl	Director	March 30, 2015

GOLDEN PHOENIX MINERALS, INC.

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations and Comprehensive Income (Loss)	F-4

Consolidated Statements of Stockholders’ Deficit	F-5

Consolidated Statements of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7

F - 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Golden Phoenix Minerals, Inc.

We have audited the accompanying consolidated balance sheets of Golden Phoenix Minerals, Inc. and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive income (loss), stockholders' deficit, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Golden Phoenix Minerals, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has an accumulated deficit of $60,626,496 at December 31, 2014, which together raises substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

HJ & Associates, LLC

Salt Lake City, Utah

March 30, 2015

F - 2

GOLDEN PHOENIX MINERALS, INC.

Consolidated Balance Sheets

	December 31,
	2014			2013
ASSETS

Current assets:
Cash	$	642,990		$	4,925
Prepaid expenses and other current assets		12,991			2,515
Deposits		190,000			-
Marketable securities		65,999			-
Total current assets		911,980			7,440

Debt issuance costs		-			4,719

Other assets		76			988

	$	912,056		$	13,147

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	560,674		$	1,480,154
Accrued liabilities		377,596			493,337
Notes payable		1,353,223			1,561,124
Accrued interest payable		-			108,738
Deposits liability		-			31,000
Derivative liability		-			136,765
Amounts due related party		-			115,066
Total current liabilities		2,291,493			3,926,184

Commitments and contingencies

Stockholders’ deficit:
Preferred stock, no par value, 50,000,000 shares authorized, none issued		-			-
Common stock; $0.001 par value, 800,000,000 shares authorized, 456,773,907 and 401,082,293 shares issued and outstanding, respectively		456,774			401,082
Additional paid-in capital		58,877,973			58,398,611
Treasury stock, 415,392 shares at cost		(49,008	)		(49,008	)
Accumulated other comprehensive loss		(38,680	)		-
Accumulated deficit		(60,626,496	)		(62,663,722	)
Total stockholders’ deficit		(1,379,437	)		(3,913,037	)

	$	912,056		$	13,147

See accompanying notes to consolidated financial statements

F - 3

GOLDEN PHOENIX MINERALS, INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

	Years Ended December 31,
	2014			2013

Revenues	$	-		$	-

Operating costs and expenses:
Exploration and evaluation expenses		216,629			156,212
General and administrative expenses		585,964			513,910
Depreciation and amortization expense		912			5,387
Total operating costs and expenses		803,505			675,509

Loss from operations		(803,505	)		(675,509	)

Other income (expense):
Interest and other income		657			48
Interest expense		(45,932	)		(89,852	)
Loss on derivative liability		(445,881	)		(57,794	)
Foreign currency gain (loss)		(1,375	)		16,935
Gain on extinguishment of debt		817,608			101,824
Gain (loss) on disposal of assets		2,515,654			(58,009	)
Total other income (expense)		2,840,731			(86,848	)

Income (loss) before income taxes		2,037,226			(762,357	)
Provision for income taxes		-			-

Net income (loss)		2,037,226			(762,357	)

Other comprehensive income – unrealized loss on marketable securities		(38,680	)		-

Comprehensive income (loss)	$	1,998,546		$	(762,357	)

Net income (loss) per common share, basic and diluted	$	0.00		$	(0.00	)

Weighted average number of shares outstanding:
Basic		449,606,185			384,041,780
Diluted		449,606,185			384,041,780

See accompanying notes to consolidated financial statements

F - 4

GOLDEN PHOENIX MINERALS, INC.

Consolidated Statements of Stockholders’ Deficit

Years Ended December 31, 2014 and 2013

	Common Stock				Additional Paid-in		Other Comprehensive			Treasury Stock					Accumulated
	Shares		Amount		Capital		Income (Loss)			Shares		Amount			Deficit			Total


Balance, December 31, 2012		369,651,524	$	369,652	$	58,256,712	$	-			415,392	$	(49,008	)	$	(61,901,365	)	$	(3,324,009	)

Issuance of common stock for:
Accrued expenses		22,200,000		22,200		135,000		-			-		-			-			157,200
Conversion of debt		9,230,769		9,230		4,616		-			-		-			-			13,846
Stock-based compensation		-		-		2,283		-			-		-			-			2,283
Net loss		-		-		-		-			-		-			(762,357	)		(762,357	)

Balance, December 31, 2013		401,082,293		401,082		58,398,611		-			415,392		(49,008	)		(62,663,722	)		(3,913,037	)

Issuance of common stock for:
Accrued expenses		6,000,000		6,000		15,600		-			-		-			-			21,600
Conversion of debt		37,191,614		37,192		30,084		-			-		-			-			67,276
Exploration expenses		6,000,000		6,000		29,300		-			-		-			-			35,300
Cash		5,000,000		5,000		5,000		-			-		-			-			10,000
Contract services		1,500,000		1,500		3,750		-			-		-			-			5,250

Warrants issued for accounts payable		-		-		142		-			-		-			-			142

Gain on settlement of related party debt		-		-		395,486		-			-		-			-			395,486

Unrealized loss on investments		-		-		-		(38,680	)		-		-			-			(38,680	)

Net income		-		-		-		-			-		-			2,037,226			2,037,226

Balance, December 31, 2014		456,773,907	$	456,774	$	58,877,973	$	(38,680	)		415,392	$	(49,008	)	$	(60,626,496	)	$	(1,379,437

See accompanying notes to consolidated financial statements

F - 5

GOLDEN PHOENIX MINERALS, INC.

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2014			2013
Cash flows from operating activities:
Net income (loss)	$	2,037,226		$	(762,357	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization expense		912			5,387
Stock issued for exploration expense		35,300			-
Stock issued for contract services		5,250			-
Stock-based compensation		-			2,284
Amortization of debt issuance costs to interest expense		4,719			4,281
Amortization of debt discount to interest expense		12,626			51,285
Loss on derivative liability		445,881			57,794
(Gain) loss on disposal of assets		(2,515,654	)		58,009
Gain on extinguishment of debt		(817,608	)		(101,824	)
Foreign currency loss		19,321			-
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses and other current assets		(10,476	)		7,239
Increase in deposits		(190,000	)		-
Increase (decrease) in accounts payable		(477,912	)		294,325
Decrease in accrued liabilities		(108,033	)		(10,367	)
Increase in deposits liability		-			31,000
Net cash used in operating activities		(1,558,448	)		(362,944	)

Cash flows from investing activities:
Proceeds from the disposal of assets		2,484,654			8,000
Purchase of marketable securities		(124,000	)		-
Net cash provided by investing activities		2,360,654			8,000

Cash flows from financing activities:
Proceeds from the issuance of notes payable		-			101,575
Net proceeds from the sale of common stock		10,000			-
Payment of notes payable		(59,075	)		(20,410	)
Payment of debt issuance costs		-			(9,000	)
Payments of amounts due related party		(115,066	)
Net cash provided by (used in) financing activities		(164,141	)		72,165

Net increase (decrease) in cash		638,065			(282,779	)
Cash, beginning of year		4,925			287,704

Cash, end of year	$	642,990		$	4,925

See accompanying notes to consolidated financial statements

F - 6

GOLDEN PHOENIX MINERALS, INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2014 and 2013

Note 1: Description of Business and Basis of Financial Statement Presentation

Organization and Description of Business

Golden Phoenix Minerals, Inc. (the “Company” or “Golden Phoenix”) is a mineral exploration and development company engaged in acquiring mineral properties with potential production and future growth through exploration discoveries. Pending requisite funding, our current growth strategy is focused on the expansion of our operations through the development of mineral properties into joint ventures or royalty mining projects. Our current efforts are focused on our properties in Nevada.

The Company was formed in Minnesota on June 2, 1997 and reincorporated in the State of Nevada in May 2008.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and of Ra Minerals, Inc. (“Ra Minerals”), a wholly owned subsidiary. All intercompany accounts and balances have been eliminated in consolidation.

Note 2: Summary of Significant Accounting Policies

Accounting Method

Our consolidated financial statements are prepared by management in conformity with United States generally accepted accounting principles using the accrual method of accounting. We have elected a December 31 year-end.

Reclassifications

Certain reclassifications have been made to the 2013 consolidated financial statements in order for them to conform to the classifications used for the current year presentation.

Concentrations

Concentration of Credit Risk — Financial instruments, which could potentially subject us to credit risk, consist primarily of cash bank deposits. We maintain certain of our cash in bank accounts insured by the Federal Deposit Insurance Corporation up to $250,000. However, our account balances, at times, may exceed federally insured limits and may be deposited in a foreign bank. We have not experienced material losses in such accounts, and believe we are not exposed to any significant credit risk with respect to our cash accounts.

Concentration of Operations — Our operations are all related to the minerals and mining industry. A reduction in mineral prices or other disturbances in the minerals markets could have an adverse effect on our operations.

Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences in these estimates and actual results could be material to our consolidated financial position and results of operations.

F - 7

Cash and Cash Equivalents

We consider all investments purchased with original maturities of three or fewer months to be cash equivalents. We had no cash equivalents at December 31, 2014 and 2013.

Marketable Securities

Marketable securities consist of investments in common stock of two publicly held mining companies. The marketable securities are stated at market value, with market value based on market quotes. Unrealized gains and losses resulting from changes in market value are recorded as other comprehensive income, a component of stockholders’ deficit in our consolidated balance sheet. Realized gains and losses resulting from the sale or disposition of marketable securities are reflected in net income or loss for the period. Estimated impairment losses that are determined to be other-than-temporary are included in net income or loss for the period.

Property and Equipment

We had no material amounts of depreciable property and equipment at December 31, 2014 and 2013.

Mine development costs are capitalized after proven and probable reserves have been identified. Amortization of mine development costs will be calculated using the units-of-production method over the expected life of the operation based on the estimated proven and probable reserves. As of December 31, 2014 and 2013, we had no mineral properties with capitalized and amortizable mine development costs.

Expenditures for maintenance and repairs are expensed when incurred and betterments are capitalized. Gains and losses on sales or dispositions of property and equipment are reflected in net income or loss for the period.

The cost and accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any related gain or loss on disposition is reflected in net income or loss for the period.

Mineral Property Acquisition Costs

Exploration and Evaluation Expenses

F - 8

Mineral Property Development Costs

Closure, Reclamation and Remediation Costs

At December 31, 2014 and 2013, we had no mining projects that had advanced to the stage where closure, reclamation and remediation costs were required to be accrued.

Property Evaluations and Impairment of Long-Lived Assets

Debt Issuance Costs

Costs incurred with the issuance of notes payable are capitalized and amortized to interest expense through the earlier of the maturity date or repayment of the notes payable.

Derivative for Conversion Feature

Fair Value of Financial Instruments

F - 9

In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” we measure certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements.

·	Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Liabilities measured at fair value on a recurring basis are as follows at December 31, 2013:

	Total		Level 1		Level 2		Level 3

Derivative liability	$	136,765	$	-	$	-	$	136,765
Convertible notes payable		32,444		-		-		32,444

Total liabilities measured at fair value	$	169,209	$	-	$	-	$	169,209

We had no liabilities measured at fair value at December 31, 2014

Revenue Recognition

Revenue from the sale of precious metals is recognized when title and risk of ownership passes to the buyer and the collection of sales proceeds is assured.

Revenue from the rental of drilling equipment is recognized when the agreed upon rental period is completed and the collection of rental proceeds is assured.

Income Taxes

Stock-Based Compensation and Equity Transactions

F - 10

Foreign Currency Transactions

Comprehensive Income (Loss)

We present the components of other comprehensive income (loss) in a single continuous consolidated statement of comprehensive income (loss). For the year ended December 31, 2012, other comprehensive income consists of unrealized gains on our marketable securities. We had no other comprehensive income or loss for the year ended December 31, 2013.

Earnings per Common Share

For the years ended December 31, 2014 and 2013, there were no common stock equivalents outstanding and, therefore, the computation of basic and diluted earnings per share were the same. At December 31, 2014, we had outstanding options and warrants to purchase a total of 19,650,000 common shares that could have a future dilutive effect on the calculation of earnings per share.

Note 3: Going Concern

As more fully described in these Notes to Consolidated Financial Statements and elsewhere in this annual report, we have entered into options and agreements for the acquisition of our Nevada mineral properties. None of these mineral properties currently have reserves. We believe we will be required to raise significant additional capital to fund our operations and to complete the acquisition of the interests in and further the exploration, evaluation and development of our existing mineral properties and other prospects. There can be no assurance that we will be successful in raising the required capital at favorable rates or at all, or that any of these mineral properties will ultimately attain a successful level of operations. If we are unable to raise sufficient capital to meet our current obligations, we may be forced to further reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws. These factors and our negative working capital position together raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

F - 11

Note 4: Mineral Properties

Our current efforts are focused on our mining properties in Nevada. These properties are early exploration stage and we have not developed any future exploration plans due to the lack of funding.

Mhakari Properties

The Mhakari properties are all in early stage exploration and do not contain any reserves. Of the three properties held under the Mhakari Option Agreement, the Vanderbilt and Coyote Fault properties have been those where we have performed exploration activities consisting of sampling and mapping. Because the three properties are exploration in nature, there is no infrastructure established.

Vanderbilt

The Vanderbilt property is located within 4 miles of the town of Silver Peak, Nevada and highway 265 via Coyote Road. It is comprised of 44 claims, plus 3 patented claims for a total of 900 acres and is located on the southern flank of Mineral Ridge within the Silver Peak Range. The Vanderbilt property is within the middle of the Walker Lane tectonic belt with the Sierra uplift to the west and the Basin and Range to the east. Phase I geologic mapping and outcrop sampling (above ground) was completed in October 2010, resulting in average grades of 2.1 g/t gold and 58.6 g/t silver. A Phase II exploration program (below ground) in the old mine workings was commenced during the first quarter of 2011 to help identify drill targets, with an exploratory drill program expected to begin as funding is obtained and the Company receives permits from the BLM.

Coyote Fault/Coyote Fault Extension

The Coyote Fault/Coyote Fault Extension claim block is within nine miles of Silver Peak, Nevada and Hwy 265 via Coyote Road. The property consists of 110 contiguous unpatented mining claims having a total of 2,200 acres, and is also located within the middle of the Walker Lane tectonic belt with the Sierra uplift to the west and the Basin and Range to the east. The property is on the northern flank of Mineral Ridge and is along the eastern edge of the Silver Peak Range. Phase 1 geologic mapping and outcrop sampling (above ground) was completed on the Coyote Fault claim group in December 2010, which identified a new potential gold exploration target. No further exploration plans have been developed at this time.

Galena Flat

The Galena Flat claims are found about 4 miles from Silver Peak, Nevada and can be accessed by dirt road from the historic town site of Blair off of State Highway 265. The project is in early stage exploration and consists of 24 unpatented lode mining claims for a total of 480 acres. Very little exploration work has been conducted on the Galena Flat Project. No sampling or mapping has been conducted, and no further exploration plans have been developed at this time.

F - 12

Amended and Restated Option Agreement

Mhakari granted us an option to acquire up to an undivided 80% interest in the Mhakari Properties for the following consideration to be paid by us to Mhakari:

Upon satisfying the consideration payable under the agreement, we shall receive an 80% undivided interest in the Mhakari Properties and the parties shall enter into a joint venture to further develop the Mhakari Properties, with us retaining an 80% interest in the joint venture. In the event that we fail to satisfy the entire purchase price by completing all cash, equity and work commitment payments within the required time frames, the agreement will be deemed to have been terminated and all payments made to date will be forfeited to Mhakari with no interest earned by us in the Mhakari Properties.

North Springs Properties

The North Springs Properties consist of a large, bulk-tonnage and a high-grade vein-shear hosted gold system located along the western margin of the Mineral Ridge Mining District, approximately 8 miles west of the town of Silver Peak and 3 miles west of the Mineral Ridge open pit and underground mines. This property consists of 16 unpatented lode mining claims comprised of 320 acres.

Both the North Springs Properties and the Mineral Ridge deposits are situated along a regional northwest trending, large anticline known as the Mineral Ridge Metamorphic Core Complex. This complex contains extensive high-grade gold veins (52 miles of underground workings on low-angle veins) and stacked, low angle, shear zones, which has been open pit mined in several deposits. The North Springs Properties occupies very similar geology, alteration and mineralization, geochemistry and structural setting to the Mineral Ridge deposits. Sampling to date has identified gold mineralization up to 0.8 ounces per ton from surface workings. The North Springs Properties contain several untested gold targets that include open-pit, disseminated mineralization and high-grade shear zones and feeder veins, such as those that have been mined by several mining companies at the nearby Mineral Ridge deposits. We plan exploration activities on the North Springs Properties in the near future as funding permits.

F - 13

Exploration and Mining Lease with Options to Purchase Agreement

Under the terms of an Exploration and Mining Lease with Options to Purchase Agreement effective June 17, 2013 (the “North Springs Agreement”), we acquired the rights to the 16 unpatented lode mining claims comprising the North Springs Properties on BLM lands in Esmeralda County, Nevada, located near the operating Mineral Ridge gold project. As required by the North Springs Agreement, we made advance royalty payments of $5,000 cash in June 2013 and issued 1,000,000 shares of our common stock in July 2013. We are further obligated to make the following payments under the terms of the North Springs Agreement:

Date	Cash Payment		Common Share Payment

First Anniversary of Effective Date	$	10,000	1,000,000 shares
Second Anniversary of Effective Date	$	15,000	1,000,000 shares
Third Anniversary of Effective Date	$	20,000	1,000,000 shares
Fourth Anniversary of Effective Date	$	25,000	1,000,000 shares
Fifth Anniversary of Effective Date	$	30,000

Six through Tenth Anniversary of Effective Date	$	50,000
Eleventh through Fifteenth Anniversary of Effective Date	$	75,000
Sixteenth and Each Subsequent Anniversary of Effective Date	$	100,000

We made the Second Anniversary cash payment and common share payment during the year ended December 31, 2014, and are current on our obligations under the North Springs Agreement.

Sale of Interest in Santa Rosa Gold Mine

Exploration and evaluation expenses related to our Mhakari and North Springs Properties included in our consolidated statements of operations for the years ended December 31, 2014 and 2013 were as follows:

	2014		2013

Mhakari Properties	$	176,177	$	142,400
North Springs Properties		40,452		13,812

Total	$	216,629	$	156,212

F - 14

Note 5: Marketable Securities and Sale of Royalty Interest

Our marketable securities consisted of 1,250,000 shares of American Mining Corporation common stock (“AMC”) and the 3,000,000 shares of Win-Eldrich Mines Ltd (“WEX”) common stock received in October 2011 in the settlement of a promissory note resulting from the sale of our interest in the Ashdown Project LLC. The marketable securities were recorded at market value, with market value based on market quotes and reduced by estimated impairment losses. We classified these marketable securities as securities held-for-sale in accordance with ASC Topic 320, Investments – Debt and Equity Securities. Unrealized gains and losses resulting from changes in market value were recorded as other comprehensive income, a component of stockholders’ equity in our consolidated balance sheet.

Pursuant to a Shares Purchase Agreement dated January 31, 2014, we sold the WEX shares for $7,000, and included this amount in gain on disposition of assets for the year ended December 31, 2014.

There is limited trading of the AMC shares and no market for the AMC shares has developed. After considering the lack of operations of AMC and the lack of trading volume of the shares, the number of shares held by us, and other factors, we have concluded that the recorded value of these marketable securities at December 31, 2014 and December 31, 2013 should be fully impaired and that the impairment loss is other-than-temporary.

On January 31, 2014, we sold for $45,000 our net smelter royalty return (“NSR”) interest relating to the operations conducted by or on behalf of the Ashdown Project LLC and included this amount in gain on disposition of assets for the year ended December 31, 2014. We acquired the NSR pursuant to the sale of our ownership interest in the Ashdown Project in May 2009 and a subsequent Termination, Settlement and Release Agreement entered into in August 2011.

These marketable securities were recorded at market value, with market value based on market quotes. We classified these marketable securities as securities held-for-sale in accordance with ASC Topic 320, Investments – Debt and Equity Securities. Unrealized gains and losses resulting from changes in market value are recorded as other comprehensive income, a component of stockholders’ equity in our consolidated balance sheet.

Note 6: Accrued Liabilities

Accrued liabilities consisted of the following at December 31, 2014 and 2013:

	2014		2013

Accrued payroll and related	$	17,500	$	92,643
Liabilities assumed in Ra acquisition		153,096		166,901
Put option liability		50,000		120,000
Legal and consulting fees		145,000		45,000
Other		12,000		68,793

	$	377,596	$	493,337

F - 15

Note 7: Notes Payable

Our notes payable consisted of the following at:

	December 31, 2014		December 31, 2013
Convertible notes payable to SV, non-interest bearing, payable September 30, 2012, currently in default	$	500,000	$	500,000
Convertible note payable to SV, non-interest bearing, payable September 30, 2012, currently in default		413,223		413,223
Note payable to Pinnacle, non-interest bearing, payable in scheduled monthly payments ranging from $15,000 to $30,000 through August 2012, currently in default		190,000		190,000
Convertible note payable to Pinnacle, non-interest bearing, payable October 31, 2013, currently in default		250,000		250,000
Note payable to an equipment supplier, extinguished in 2014		-		175,457
Convertible notes payable to an institutional investor, net of discount, repaid in 2014		-		32,444

	$	1,353,223	$	1,561,124

Convertible Notes Payable to Institutional Investor

On June 4, 2013, August 22, 2013, November 5, 2013, and November 15, 2013, we entered into convertible promissory notes payable to an institutional investor (“investor”) for $42,500, $32,500, $15,575, and $11,000, respectively, (“Convertible Notes”), which bore interest at an annual rate of 8% and were to mature on March 6, 2014, May 27, 2014, August 7, 2014, and August 19, 2014, respectively. The investor had the right, after the first 180 days of the notes, to convert the Convertible Notes and accrued interest in whole or in part into shares of our common stock at a price per share equal to 58% (representing a discount rate of 42%) of the average of the lowest three trading prices for our common stock during the ten trading day period ending one trading day prior to the date of the conversion notice.

At any time for the period beginning on the date of the Convertible Notes and ending on the date which is 30 days following the date of the Convertible Notes, we had the option to prepay the Convertible Notes upon payment of an amount equal to the outstanding principal multiplied by 110%, together with accrued and unpaid interest. The amount of the prepayment increased every subsequent 30 days to 115%, 120%, 125%, 130% and 135% of the outstanding principal together with accrued and unpaid interest. After the expiration of 180 days following the date of the Convertible Notes, we had no right of prepayment.

At the inception of the June 4, 2013 Convertible Note of $42,500, we recorded debt issuance costs of $3,000 and a debt discount and a derivative liability of $42,093 related to the conversion feature. In December 2013, we paid $14,815 principal and, in December 2013 and January 2014, the investor converted $27,685 principal and $1,700 accrued interest into shares of our common stock, extinguishing the obligation in full.

At the inception of the August 22, 2013 Convertible Note, we recorded debt issuance costs of $3,000, a debt discount of $32,500 and a derivative liability of $55,894 related to the conversion feature. In February 2014, we extinguished the obligation in full by payment of $32,500 principal and $1,268 in accrued interest.

At the inception of the November 5, 2013 Convertible Note, we recorded debt issuance costs of $1,500, a debt discount of $15,575 and a derivative liability of $35,765 related to the conversion feature. In February 2014, we extinguished the obligation in full by payment of $15,575 principal and $369 in accrued interest.

At the inception of the November 15, 2013 Convertible Note, we recorded debt issuance costs of $1,500, a debt discount of $11,000 and a derivative liability of $17,238 related to the conversion feature. In February 2014, we extinguished the obligation in full by payment of $11,000 principal and $236 in accrued interest.

F - 16

Interest expense for the amortization of the debt discount was calculated on a straight-line basis over the life of the Convertible Notes and totaled $12,626 for the year ended December 31, 2014.

During the year ended December 31, 2014, we had the following activity in the accounts related to the Convertible Notes:

	Derivative Liability			Debt Discount			Loss on Derivative Liability			Gain on Extinguishment of Debt		Interest Expense

Balance at December 31, 2013	$	136,765		$	(42,316	)	$	-		$	-	$	-
Adjustment to derivative liability		445,881			-			(445,881	)		-		-
Amortization of debt discount to interest expense		-			12,626			-			-		(12,626	)
Repayment of debt		(582,646	)		29,690			-			503,065		-

Balance at December 31, 2014	$	-		$	-		$	(445,881	)	$	503,065	$	(12,626	)

In estimating the fair value of the derivative and calculating the adjustment to the derivative liability during the year ended December 31, 2014, we used the Black-Scholes pricing model with the following range of assumptions:

Risk-free interest rate	0.08 – 0.025%
Expected life in years	0.48 - 0.12
Dividend yield	0%
Expected volatility	274.75 – 446.16%

Other Notes Payable

The two convertible notes payable to Sala-Valc S.A.C., a Peruvian corporation (“SV”), resulted from an Amendment to Mining Asset Purchase and Strategic Alliance Agreement related to mineral properties in Peru.

The two notes payable to Pinnacle Minerals Corporation (“Pinnacle”) resulted from an Amendment to Membership Interest Purchase Agreement whereby we purchased Pinnacle’s membership interest in Molyco, LLC, which owns or controls portions of mineral properties in Peru. Pinnacle has initiated legal action related to these unpaid obligations (see Note 13).

The parties involved in the mineral property projects in Peru were not able to finalize the transfer agreements to be filed with Peruvian governmental authorities to affect the transfer to us of the mineral properties in Peru. We have therefore discontinued our efforts in Peru, and the ultimate disposition of the convertible notes payable to SV and the notes payable to Pinnacle is dependent on our resolution of our dispute with SV and of the legal actions discussed in Note 13. We are currently unable to predict the ultimate outcome of these matters.

Note 8 – Amounts Due Related Party

Amounts due to related party at December 31, 2013 consisted of a note due to Robert P. Martin, former Chairman of our Board of Directors, resulting from a debt settlement agreement entered into in April 2010. The repayment terms of the note were restructured as part of a consulting agreement entered into with Mr. Martin effective September 1, 2011. During the year ended December 31, 2014, we repaid or otherwise settled all amounts due Mr. Martin, including the note principal and related accrued interest payable.

F - 17

Note 9: Stockholders’ Deficit

We have 50,000,000 shares of no par value, non-voting convertible preferred stock authorized. As of December 31, 2014 and 2013, there were no shares of preferred stock outstanding.

We also have 800,000,000 shares of $0.001 par value common stock authorized.

During the year ended December 31, 2014, we issued a total of 51,191,614 shares of our common stock: 6,000,000 shares valued at $21,600 in payment of accrued expenses; 37,191,614 shares valued at $67,276 for conversion of debt; 6,000,000 shares valued at $35,300 for exploration expenses; 5,000,000 shares for cash of $10,000 and 1,500,000 shares valued at $5,250 for contract services provided by members of our Board of Directors.

During the year ended December 31, 2013, we issued a total of 31,430,769 shares of our common stock: 6,200,000 shares valued at $62,000 to a member of our Board of Directors, for accrued services in accordance with a Consulting Agreement with him; 16,000,000 shares valued at $95,200 for accrued exploration and evaluation expenses pursuant to our mineral property option agreements; and 9,230,769 shares valued at $13,846 for conversion of debt.

On April 21, 2014 we completed a Stock Purchase Agreement entered into on January 31, 2014 with an investor and received $10,000. The investor purchased 5,000,000 units at $0.002 per unit, with each unit comprised of one share of restricted common stock of the Company and a five-year warrant to purchase one share of common stock of the Company at an exercise price of $0.003 per share.

As of December 31, 2014 and 2013, we had 415,392 shares of our common stock acquired in a previous stock repurchase program that were recorded as treasury shares at a cost of $49,008.

Note 10: Stock Warrants

We have issued warrants to purchase shares of our common stock in connection with equity financing agreements and pursuant to certain consulting agreements.

A summary of the status of our stock warrants as of December 31, 2014, and changes during the two years then ended is as follows:

				Weighted Average
	Shares			Exercise Price

Outstanding, December 31, 2012		34,083,333		$	0.08

Granted		-			-
Canceled / Expired		(7,333,333	)	$	0.17
Exercised		-			-

Outstanding and exercisable, December 31, 2013		26,750,000		$	0.06

Granted		5,150,000		$	0.0044
Canceled / Expired		(12,250,000	)	$	0.066
Exercised		-			-

Outstanding and exercisable, December 31, 2014		19,650,000		$	0.0043

F - 18

The following summarizes the exercise price per share and expiration date of our outstanding warrants to purchase common stock at December 31, 2014:

Expiration Date	Price		Number

2015	$	0.05		4,000,000
2017	$	0.06		2,500,000
2017	$	0.04		4,000,000
2017	$	0.08		4,000,000
2017	$	0.05		150,000
2019	$	0.003		5,000,000

				19,650,000

During the year ended December 31, 2014, we issued five-year warrants to purchase 5,000,000 shares of our common stock at an exercise price of $0.003 per share (see Note 9).

During the year ended December 31, 2014, we issued three-year warrants to purchase 150,000 shares of our common stock at an exercise price of $0.05 per share. The warrants were issued in connection with the extinguishment of debt and were valued at $142 using the Black-Scholes option- pricing model.

Note 11: Stock-Based Compensation

We account for stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation. Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the estimated value of the award granted, using the Black-Scholes option pricing model, and recognized over the period in which the award vests in general and administrative expenses.

Stock-based compensation expense included in general and administrative expenses for the years ended December 31, 2014 and 2013 was $0 and $2,284, respectively.

The following table summarizes the stock option activity during the years ended December 31, 2014 and 2013:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contract Term		Aggregate Intrinsic Value

Outstanding at December 31, 2012		7,850,000		$	0.11
Granted		600,000		$	0.004
Exercised		-		$	-
Expired or cancelled		(3,150,000	)	$	0.13

Outstanding, vested and exercisable at December 31, 2013		5,300,000		$	0.09		2.20	$	-
Granted		-		$	-
Exercised		-		$	-
Expired or cancelled		(2,000,000	)	$	0.11

Outstanding, vested and exercisable at December 31, 2014		3,300,000		$	0.08		2.12	$	-

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on our closing stock price of $0.002 and $0.0012 as of December 31, 2014 and 2013, respectively, which would have been received by the holders of in-the-money options had the option holders exercised their options as of that date.

As of December 31, 2014, there was no future compensation cost related to non-vested stock-based awards not yet recognized in the consolidated statements of operations and comprehensive income (loss).

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Note 12: Income Taxes

The (provision) benefit for income taxes is different than amounts that would be provided by applying the statutory federal income tax rate to income (loss) before income taxes for the following reasons:

	Years Ended December 31,
	2014			2013

Income tax (provision) benefit at statutory rate	$	(692,657	)	$	259,202
Stock or warrants issued for services and expenses		(21,179	)		(19,650	)
Interest expense		(4,293	)		(17,437	)
Other		19,325			22,584
Change in valuation allowance		698,804			(244,699	)

Less accumulated depreciation and amortization	$	-		$	-

Deferred tax assets (liabilities) are comprised of the following at December 31:

	2014			2013

Net operating loss carry forwards	$	10,941,421		$	10,713,277
Accrued expenses		28,475			296,720
Mineral properties		504,558			2,620,535
Marketable securities		-			170,476
Depreciation		(26	)		270
Stock-based compensation		292,980			292,980
Other		1,490			1,490
		11,768,898			14,095,748
Valuation allowance		(11,768,898	)		(14,095,748	)

Net deferred taxes	$	-		$	-

At December 31, 2014, we had a net operating loss carry forward available to offset future taxable income of approximately $32,181,000 that will begin to expire in 2015. If substantial changes in our ownership should occur, there would also be an annual limitation of the amount of the net operating loss carry forward that could be utilized.

FASB ASC Topic 718-740, Income Taxes, requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-non threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. We performed a review of our material tax positions in accordance with recognition and measurement standards established by ASC Topic 718-740. We have no unrecognized tax benefit that would affect the effective tax rate if recognized.

We classify interest and penalties arising from the underpayment of income taxes in the statements of operations and comprehensive income (loss) under general and administrative expenses. As of December 31, 2014 and 2013, we had no accrued interest or penalties related to uncertain tax positions.

We currently file income tax returns in the U.S. federal jurisdiction and in the state of Utah. We also have historically conducted operations in Peru, Panama and Canada; however we currently have no operations outside the United States.

All U.S. federal net operating loss carry forwards through the year ended December 31, 2014 are subject to examination.

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Note 13: Consulting Agreements

Donald B. Gunn

Dennis P. Gauger

On January 15, 2013, the Board of Directors appointed Dennis P. Gauger as our Chief Financial Officer and Corporate Secretary. Pursuant to an Independent Contractor Agreement, Mr. Gauger was to perform the agreed upon duties for a period of one year and be paid $5,000 per month through June 2013 and $7,500 per month for the remainder of the contract. Effective September 1, 2013, Mr. Gauger’s compensation was reduced to $3,000 per month and, effective May 1, 2014, Mr. Gauger’s compensation was increased to $5,000 per month. Mr. Gauger is eligible to participate in our stock option plan as approved by the Board of Directors.

Effective May 1, 2014, the Board of Directors of the Company approved the following monthly compensation levels for members of our Interim Governing Board (“IGB”): Donald Gunn $9,000 and John Di Girolamo and Jeffrey Dahl $7,000. The three members of the IGB each also received 500,000 restricted shares of common stock of the Company. The Board also approved monthly compensation of $5,000 for Dennis Gauger, Chief Financial Officer, effective May 1, 2014.

Note 14: Legal Matters

Note 15: Related Party Transactions

As more fully discussed in Note 8, at December 31, 2013, amounts due related party was $115,066, comprised of a note to Robert P. Martin, our former Chairman of the Board of Directors. During the year ended December 31, 2014, we repaid or otherwise settled all amounts due Mr. Martin, including the note principal and related accrued interest payable.

As discussed in Note 13, we have entered into certain consulting with our officers and directors and have issued shares of our common stock in payment of certain compensation obligations.

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As of December 31, 2014 and 2013, accounts payable included amounts due to related parties of $68,500 and $765,649, respectively.

During the year ended December 31, 2014, we extinguished debt with related parties and recorded a gain on settlement of related party debt of $461,736 to additional paid-in capital.

Note 16: Supplemental Statement of Cash Flows Information

During the years ended December 31, 2014 and 2013, we made no cash payments for income taxes.

During the years ended December 31, 2014 and 2013, we made cash payments for interest of $19,457 and $8,958, respectively.

During the year ended December 31, 2014, we had the following non-cash financing and investing activities:

·	Decreased accrued interest payable by $1,700, decreased notes payable by $15,685, decreased debt discount by $2,967, decreased derivative liability by $52,106, increased common stock by $37,192 and increased additional paid-in capital by $30,084 for common shares issued in conversion of debt.

·	Decreased accrued liabilities by $21,600, increased common stock by $6,000 and increased additional paid-in capital by $15,600 for common shares issued for accrued liabilities.

·	Decreased accounts payable and increased additional paid-in capital by $143 for warrants issued for accounts payable.

·	Decreased accounts payable and increased additional paid-in capital by $461,735 for related party accounts payable settled and recorded as a contribution to capital.

·	Decreased marketable securities and increased other comprehensive loss by $38,680 for unrealized loss on marketable securities.

During the year ended December 31, 2013 we had the following non-cash financing and investing activities:

·	Decreased accrued liabilities by $157,200, increased common stock by $22,200 and increased additional paid-in capital by $135,000 for common shares issued in payment of accrued consulting fees and exploration and evaluation expenses.

·	Decreased notes payable by $12,000, increased common stock by $9,230 and increased additional paid-in capital by $2,770 for common shares issued for conversion of debt.

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Note 17: Recent Accounting Pronouncements

Note 18: Subsequent Events

We have evaluated events occurring after the date of our accompanying consolidated balance sheet and through the date of the filing of this Annual Report on Form 10-K. No material subsequent events requiring adjustment to our accompanying consolidated financial statements or requiring disclosure were identified.

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