THUNDER MOUNTAIN GOLD INC Management Report or Operating Plan (Form 10-Q)

The following Management's Discussion and Analysis of Financial Condition and
Results of Operation ("MD&A") is intended to help the reader understand our
financial condition. MD&A is provided as a supplement to, and should be read in
conjunction with, our financial statements and the accompanying integral notes
("Notes") thereto. The following statements may be forward-looking in nature and
actual results may differ materially.

COVID-19[feminine]

In March 2020, COVID-19 was declared a pandemic by the World Health Organization
and the Centers for Disease Control and Prevention. Its rapid spread around the
world and throughout the United States prompted many countries, including the
United States, to institute restrictions on travel, public gatherings, and
certain business operations. These restrictions disrupted economic activity in
the Company's business related to raising capital. As of June 30, 2022, the
disruption did not materially impact the Company's financial statements.
However, if the severity of the economic disruptions increase as the duration of
the COVID-19 pandemic continues, the negative financial impact due to the
BeMetals Option Agreement could be significantly greater in future periods.

The effects of the continued outbreak of COVID-19 and related government
responses could have disruptions to the Company`s Option Agreement with BeMetals
Corp. Under the terms of the BeMetals Option Agreement, BMET USA will be
entitled to purchase 100% of the issued and outstanding shares of South Mountain
Mines, Inc. ("SMMI") from the Company. The term of the agreement is for two
years starting June 10, 2019, with an option to extend an additional year, with
BeMetals conducting a preliminary economic assessment ("PEA") completed by a
mutually agreed third-party engineering firm. Over its term, this agreement
requires cash payments to the Company of $1,350,000; $1,100,000 in cash and
$250,000 in exchange for shares of the Company's common stock. In the event that
BeMetals decides not to proceed with the South Mountain Project, BeMetals will
not be obligated to make any additional payments. The COVID-19 outbreak could
have a variety of adverse impacts to the Company, including their ability to
continue operations of their exploration under the BeMetals Operation Agreement.
Thunder Mountain Gold evaluated these impairment considerations and determined
that no such impairments occurred as of June 30, 2022.

Additional COVID-19 Precautions

Thunder Mountain Gold Inc. has also taken steps to mitigate the potential risks
to employees and suppliers posed by the spread of COVID-19. The Company has
taken extra precautions for employees who work under the terms of the BeMetals
Option Agreement, and have implemented work from home policies where
appropriate.

As of June 30, 2022, there has been no material adverse impact to the BeMetals
Operation Agreement. Management will continue to review and modify plans as
conditions change. Despite efforts to manage these impacts to the Company, the
ultimate impact of COVID-19 also depends on factors beyond management's
knowledge or control, including the duration and severity of this outbreak as
well as third-party actions taken to contain its spread and mitigate its public
health effects. Therefore, management cannot estimate the potential future
impact to financial position, results of operations and cash flows, but the
impacts could be material.

Operation plan:

FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking
statements that involve a number of risks and uncertainties. Factors that could
cause actual results to differ materially include the following: inability to
locate property with mineralization, lack of financing for exploration efforts,
competition to acquire mining properties; risks inherent in the mining industry,
and risk factors that are listed in the Company's reports and registration
statements filed with the Securities and Exchange Commission.

On February 27, 2019, the Company entered into an Option Agreement, (the
"BeMetals Option Agreement") with BeMetals Corp. Under the terms of the BeMetals
Option Agreement, BMET USA will be entitled to purchase 100% of the issued and
outstanding shares of South Mountain Mines, Inc. ("SMMI") from Thunder Mountain
Resources, Inc. ("TMRI"), both wholly owned subsidiaries of the Company. The
term of the agreement is for two years with BeMetals completing a PEA completed
by a mutually agreed third-party engineering firm. Over its term, this agreement
requires BeMetals to issue 10,000,000 shares of BMET stock to the Company, and
cash payments to the Company of $1,350,000: $1,100,000 in cash and $250,000 in
exchange for shares of the Company's common stock. Through June 30, 2022, cash
proceeds of $1,100,000 and $250,000 in exchange for shares of the Company's
common stock have been received. In the event BeMetals decides not to proceed
with the South Mountain Project, BeMetals will not be obligated to make any
additional payments.

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The company’s operating plan through the end of calendar year 2022 will support BeMetals Corp. during its option period and will contribute to the exploration and advancement of the project. Planned exploration at South Mountain in 2022 includes additional surface drilling and surface geophysical surveys.

Southern Mountain Project, Owyhee County, Idaho

South Mountain is a polymetallic development project focused on high-grade zinc,
silver and gold. It is located approximately 70 miles southwest of Boise, Idaho
(see Figure 2). The Project was intermittently mined from the late 1800s to the
late 1960s and its existing underground workings remain intact and well
maintained. Historic production at the Project has largely come from high-grade
massive sulfide bodies that remain open at depth and along strike. According to
historical smelter records, approximately 53,642 tons of mineralized material
has been mined to date. These records also indicate average grades; 14.5% Zn,
11.63 opt Ag, 0.063 opt Au, 2.4% Pb, and 1.4% Cu were mined.

Thunder Mountain Gold Inc. purchased and advanced the Project from 2007 through
2019 investing approximately US$12M during that period. The current mineral
resource estimate of the deposit is detailed in Table 3 below and the Company
expects to provide a revised mineral resource update following a phase 2
drilling program in 2020.

The project is largely on and surrounded by private surface land, and as such the environmental and permitting aspects of the project should be straightforward. Permits are currently in place for both underground and surface exploration and development activities.

Figure 2. Location of Southern Mountain Project

                               [[Image Removed]]

Southern Mountain Project – BeMetals option contract

Under the BeMetals Corporation (TSX-V: BMET) Option Agreement, BeMetals and
Thunder Mountain Gold formed a project team early in 2019 that is focused on
advancing the South Mountain Project. This Boise Idaho-based team includes key
management of Thunder Mountain Gold Inc., who have coordinated re-establishment
of the Project site prior to the start of drilling. In addition, BeMetals
appointed a project manager and project geologist for this team, along with
technical and underground support.

                                       17

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With the help of Thunder Mountain Gold, BeMetals (BMET) commenced drilling at
South Mountain in July of 2019 and drilled twenty-one holes totaling 7,517 feet
(2,290 meters) from five underground drilling stations within the Sonneman
level. The drilling program was designed to test potential down plunge
extensions, and overall continuity to the mineralized zones and confirm the
grade distribution of the current polymetallic mineral resource. All of the
drill core recovered from the drilling was logged on site and assayed by ALS
Chemex. Selected intervals and results are summarized in the Company`s Form 10K
for the year ended December 31, 2021.

On September 21, 2021, the Company agreed to an extension of the Option
Agreement with BeMetals Corp. The Extension is through the 2022 calendar year,
with the same terms to acquire up to a 100% interest in the South Mountain
Project in southwest Idaho, U.S.A. In exchange for the Extension, BeMetals paid
the Company the Tranche 6 Payment of $250,000.

PROJECT HIGHLIGHTS – SOUTH MOUNTAIN PROJECT

In May of 2021, BeMetals Corp. completed an updated Mineral Resource Estimate
("MRE"), incorporating results from Phase 1 and 2 underground diamond drilling
programs at the South Mountain Project. The updated MRE includes a substantially
increased resource for the Project while maintaining the high-grade nature of
the mineralization.

The updated Independent MRE, which has an effective date of April 20, 2021, was
prepared in accordance with National Instrument 43-101 Standards of Disclosure
for Mineral Projects ("NI-43-101") by Hard Rock Consulting, LLC, based in the
U.S.A. More details are included in Tables 1 & 2 below and a technical report
for this MRE was filed with SEDAR, and on the Company's website, within 45 days
from the date of this news release.

After signing the Option Agreement Extension, BeMetals Corp. embarked on a phase
3 program at South Mountain with the objective to significantly expand the scale
of the current Mineral Resource Estimate ("MRE") at South Mountain (See Summary
of the MRE below), testing and establishing the down depth extent of
mineralization on the DMEA zone. The DMEA Zone is the largest known body of
mineralization on the Property, containing the majority of tonnage in the
current MRE, and the mineralized zone remains open at depth.

Based on the last two phases of underground drilling and all the historical
exploration data available, we believe there is the potential to expand the
down-plunge extensions of the mineral resource with this new phase of surface
drilling at the Property. The plan is to initially complete approximately 7,000
feet (2,100 meters) of surface core drilling in this phase of exploration.
Assuming this exploration program is successful, the BMET will update the
current MRE and continue the ongoing Preliminary Economic Assessment for the
Project in 2022.

As of December 2021, 2 surface core holes have been drilled for a combined total of 3,600 feet, the results of which have been added to the resource model.

                                       18

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MINERAL RESOURCE ESTIMATE

                     HIGHLIGHTS OF UPDATED MINERAL RESOURCE

º Measured and Indicated (“M&I”): 206,900 tonnes grading 9.63% zinc (“Zn”), 4.41

ounces per ton (“opt”) Silver (“Ag”), 0.064 opt Gold (“Au”), 1.01% Lead

(“Pb”) and 0.63% copper (“Cu”).

º This represents a 21.8% increase in M&I tonnage compared to the

2019 MRE with a Zn equivalent content of 20.36% (“ZnEq”).

º Inferred: 833,700 tonnes grading 7.63% Zn, 5.72 opt Ag, 0.041 opt Au, 0.97%

Pb and 0.81% Cu.

º This represents a 129.5% increase in assumed tonnage from

Historical MRE 2019 with a ZnEq of 18.10%.

Note: See table 1 and 2 footnotes section 4 for more details on the calculation of the Zn equivalent content

In two phases of underground drilling completed during 2019 and 2020 a combined
total of approximately 16,000 feet of underground core drilling was completed at
South Mountain. During these drilling campaigns, our site team also widened and
advanced the existing Sonneman level eastwards by 170 feet to establish a new
drill station closer to the Texas Zone. All the results of this drilling have
now been in incorporated into the updated MRE for the South Mountain deposit.

Tables 1 & 2 below provide the Mineral Resource Statement for the Project in
U.S. and Metric units respectively with details of the modelling methodology and
cut-off grades applied to the mineral resource. Figure 1 illustrates the
principal areas where the South Mountain deposit has been expanded from the
historical MRE that was completed in 2019. The historical Technical Report for
the Mineral Resource Estimate for the South Mountain Project Owyhee County,
Idaho USA Report Date: Dated: April 1, 2019 is filed on SEDAR.

Table 1. South Mountain Mineral Resource Statement (WE Units)

Grades and Metal Content

   Ore Type     Classification   Mass   Zinc     Zinc     Silver  Silver   Gold    Gold   Lead     Lead     Copper   Copper    ZnEq
                               thousand                     t.   thousand   t.   thousand
                               sh. ton    %   thousand lb oz/sh.  t. oz   oz/sh.  t. oz     %   thousand lb   %    thousand lb   %
                                                           ton             ton
                   Measured      53.8   11.45   12,300     3.67    197    0.069    3.7    0.79      900      0.46      500     20.21
                  Indicated     118.9   11.36   27,000     4.77    568    0.077    9.1    1.36     3,200     0.53     1,300    22.14
Massive Sulfide   Measured +    172.8   11.39   39,300     4.43    765    0.074    12.9   1.18     4,100     0.51     1,800    21.54
                  Indicated
                   Inferred     777.2   8.09    125,700    5.90   4,586   0.043    33.7   1.04    16,100     0.74    11,500    18.34




                                       19

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Measured 10.6 1.25 300 5.46 58 0.023 0.2 0.30 100 1.26 300 18.23

Indicated 23.5 0.49 200 3.78 89 0.005 0.1 0.07 0 1.20 600 12.63

Skarn measured

             +     34.1  0.72   500   4.30  147  0.011 0.4  0.14  100   

1.21 800 14.38

Noted

Inferred 56.5 1.34 1500 3.19 181 0.006 0.3 0.04 100 1.66 1900 14.92

Measured 64.5 9.77 12,600 3.96 255 0.062 4.0 0.71 900 0.59 800 19.88

Indicated 142.4 9.57 27,200 4.61 656 0.065 9.2 1.15 3,300 0.64 1,800 20.57

Total measured

             +     206.9 9.63 39,800  4.41  912  0.064 13.2 1.01 4,200  

0.63 2600 20.36

Noted

Inferred 833.7 7.63 127,300 5.72 4,766 0.041 34.0 0.97 16,200 0.81 13,400 18.10


1.) The effective date of the mineral resource estimate is April 20th, 2021. The
QP for the estimate is Mr. Richard A. Schwering, P.G., SME-RM, of Hard Rock
Consulting, LLC. and is independent of BeMetals Corp., Thunder Mountain Gold
Inc., and South Mountain Mines Inc.
2.) Mineral resources are not mineral reserves and do not have demonstrated
economic viability such as diluting materials and allowances for losses that may
occur when material is mined or extracted; or modifying factors including but
not restricted to mining, processing, metallurgical, infrastructure, economic,
marketing, legal, environmental, social and governmental factors. Inferred
mineral resources may not be converted to mineral reserves. It is reasonably
expected, though not guaranteed, that the majority of Inferred mineral resources
could be upgraded to Indicated mineral resources with continued exploration.
3.) The mineral resource is reported at an underground mining cutoff of $102.5
U.S. Net Smelter Return ("NSR") within coherent wireframe models. The NSR
calculation and cut-off is based on the following assumptions: an Au price of
$1,750/oz, Ag price of $23.00/oz, Pb price of $1.02/lb., Zn price of $1.20/lb.
and Cu price of $3.40/lb.; Massive Sulfide ore type metallurgical recoveries and
payables of 52.25% for Au, 71.25% for Ag, 71.40% for Zn, 66.50% for Pb, and
49.00% for Cu and a total smelter cost of $33.29; Skarn ore type metallurgical
recoveries and payables of 71.25% for Au, 80.75% for Ag, 51.00% for Zn, 47.50%
for Pb, and 87.70% for Cu and a smelter cost of $7.24; assumed mining cost of
$70/ton, process costs of $25/ton, and general and administrative costs of
$7.5/ton. Based on the stated prices and recoveries the NSR formula is
calculated as follows; NSR = (Ag grade * Ag price * Ag Recovery and Payable) +
(Au grade * Au price * Au Recovery and Payable) + (Pb grade * 20 * Pb Price * Pb
Recovery and Payable) + (Cu grade * 20 * Cu Price * Cu Recovery and Payable) +
(Zn grade * 20 * Zn Price * Zn Recovery and Payable) for each ore type.
4.) The zinc equivalent grades were calculated as Zn Grade + (((Pb Price * Pb
Recovery and Payable) / (Zn Price*Zn Recovery and Payable)) * Pb Grade) + (((Cu
Price * Cu Recovery and Payable) / (Zn Price * Zn Recovery and Payable)) * Cu
Grade) + (((Ag Price * Ag Recovery and Payable) / (Zn Price * 20 * Zn Recovery
and Payable)) * Ag Grade) + (((Au Price * Au Recovery and Payable) / (Zn Price *
20 * Zn Recovery and Payable)) * Au Grade)
5.) Rounding may result in apparent differences when summing tons, grade and
contained metal content. Tonnage and grade measurements are in U.S. units.

Table 2. South Mountain mineral resource statement (metric units)

                                                           Grades and 

Type of metallic ore content Classification Mass Zinc Zinc Silver Silver Gold Gold Lead Lead Copper Copper ZnEq

                                kt     %      t      ppm     kg    ppm      

g% t% T%

               Measured       48.85  11.45  5,600    126    6,100  2.38  116,200  0.79 400.00  0.46   200   20.21
Massive       Indicated       107.90 11.36 12,300.0  164   17,700  2.63  283,500  1.36 1,500   0.53   600   22.14
Sulfide  Measured + Indicated 156.75 11.39 17,800.0  152   23,800  2.55  399,700  1.18 1,900   0.51   800   21.54
               Inferred       705.03 8.09  57,000.0  202   142,600 1.49 

1,049,000 1.04 7,300 0.74 5,200 18.34

               Measured        9.62  1.25   100.0    187    1,800  0.78   7,500   0.30   0     1.26   100   18.23
 Skarn        Indicated       21.28  0.49   100.0    130    2,800  0.17   3,700   0.07   0     1.20   300   12.63
         Measured + Indicated 30.90  0.72   200.0    148    4,600  0.36  11,200   0.14   0     1.21   400   14.38
               Inferred       51.26  1.34   700.0    110    5,600  0.19   9,900   0.04   0     1.66   900   14.92




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Measured 58.47 9.77 5,700.0 136 7,900 2.12 123,700 0.71 400 0.59 300 19.88

Indicated 129.18 9.57 12,400.0 158 20,400 2.22 287.300 1.15 1,500 0.64 800 20.57 Measured total + 187.65 9.63 18,100.0 151 28,400 2.19 411,000 1 .01 1,900 0.63 1.200 20.36

Noted

Inferred 756.30 7.63 57,700.0 196,148,200 1.40 1,058,900 0.97 7,300 0.81 6,100 18.10


1) The effective date of the mineral resource estimate is April 20th, 2021. The
QP for the estimate is Mr. Richard A. Schwering, P.G., SME-RM, of Hard Rock
Consulting, LLC. and is independent of BeMetals, Corp., Thunder Mountain Gold
Inc., and South Mountain Mines Inc.
2) Mineral resources are not mineral reserves and do not have demonstrated
economic viability such as diluting materials and allowances for losses that may
occur when material is mined or extracted; or modifying factors including but
not restricted to mining, processing, metallurgical, infrastructure, economic,
marketing, legal, environmental, social and governmental factors. Inferred
mineral resources may not be converted to mineral reserves. It is reasonably
expected, though not guaranteed, that the majority of Inferred mineral resources
could be upgraded to Indicated mineral resources with continued exploration.
3) The mineral resource is reported at an underground mining cutoff of $102.5
U.S. Net Smelter Return ("NSR") within coherent wireframe models. The NSR
calculation and cut-off is based on the following assumptions: an Au price of
$1,750/oz, Ag price of $23.00/oz, Pb price of $1.02/lb., Zn price of $1.20/lb.
and Cu price of $3.40/lb.; Massive sulfide ore type metallurgical recoveries and
payables of 52.25% for Au, 71.25% for Ag, 71.40% for Zn, 66.50% for Pb, and
49.00% for Cu and a total smelter cost of $33.29; Skarn ore type metallurgical
recoveries and payables of 71.25% for Au, 80.75% for Ag, 51.00% for Zn, 47.50%
for Pb, and 87.70% for Cu and a smelter cost of $7.24; assumed mining cost of
$70/ton, process costs of $25/ton, and general and administrative costs of
$7.5/ton. Based on the stated prices and recoveries the NSR formula is
calculated as follows; NSR = (Ag grade * Ag price * Ag Recovery and Payable) +
(Au grade * Au price * Au Recovery and Payable) + (Pb grade * 20 * Pb Price * Pb
Recovery and Payable) + (Cu grade * 20 * Cu Price * Cu Recovery and Payable) +
(Zn grade * 20 * Zn Price * Zn Recovery and Payable) for each ore type.
4) The zinc equivalent grades were calculated as Zn Grade + (((Pb Price * Pb
Recovery and Payable) / (Zn Price*Zn Recovery and Payable)) * Pb Grade) + (((Cu
Price * Cu Recovery and Payable) / (Zn Price * Zn Recovery and Payable)) * Cu
Grade) + (((Ag Price * Ag Recovery and Payable) / (Zn Price * 20 * Zn Recovery
and Payable)) * Ag Grade) + (((Au Price * Au Recovery and Payable) / (Zn Price *
20 * Zn Recovery and Payable)) * Au Grade)
5) Rounding may result in apparent differences when summing tons, grade and
contained metal content. Tonnage and grade measurements are in U.S. units and
converted to metric.

PHASE 2 DRILLING ZONE TEXAS – SOUTH MOUNTAIN PROJECT

A total of 8,904 feet (2,714 meters) of underground core drilling was completed
during Phase 2, with 30 holes in both the Texas and DMEA zones. During this
drilling campaign, our site team widened and advanced the existing Sonneman
level eastwards by 170 feet (52 meters) to establish a new drill station closer
to the Texas Zone (See Figure 1). With better access to drill the Texas Zone, a
total of 24 holes were completed to test this zone of mineralization. Geological
logging of the core supported by sampling results indicate that two styles of
high-grade mineralization have developed in this area and are now identified as
the Texas West and Texas East zones.

Table 1 below illustrates the drilling results received to date from the Texas
West Zone. This zone is characterized by skarn-hosted, dominantly copper and
silver mineralization. This is demonstrated, for example, in the drilled
intercepts:

º 3.81% Cu with 7.82 opt (244.3 g/t) Ag over 15.7 feet (4.79 meters) in hole

SM20-043 (interval 1),

º 2.56% Cu with 8.32 opt (260.1 g/t) Ag over 35.6 feet (10.85 meters)

SM20-028, and

º 2.23% Cu with 10.81 opt (337.9 g/t) Ag over 16.96 feet (5.17 meters)

     hole SM20-038.

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Geological logs of the core demonstrate that the higher copper grades over
significant drilled widths in Texas West appear to be controlled by the
increased abundance of chalcopyrite, which is a common copper sulphide mineral,
often extractable through conventional flotation methods. Representative sample
material of this and other zones of the deposit have been identified and are
being collected for metallurgical test work at the SGS Mineral Services site in
Lakefield, Canada. Results from this study will be included with historical test
work and incorporated into the planned PEA study later this year.

Table 2 below displays the drill hole intersections from the East Texas Zone
where this mineralization is represented mainly by massive sulphides containing zinc, silver and gold mineralization. Examples of this style of mineralization are the intersections:

º 8.65% Zn, 6.98 opt (218.1 g/t) Ag and 0.078 opt (2.44 g/t) Au over 11 feet

(3.37 meters) in hole SM20-043 (Interval 2), and

º 4.17% Zn, 6.23 opt (194.8 g/t) Ag and 0.130 opt (4.05 g/t) Au over 27.39

feet (8.35 meters) into hole SM20-050.

The gold grades of 0.130 opt (4.05 g/t) over 27.39 feet (8.35 meters); 0.066 opt
(2.07 g/t) over 15.45 feet (4.71 meters) and 0.122 opt. (3.82 g/t) over 4.39
feet (1.34 meters) in holes SM20-050, SM20-043, and SM20-029, respectively, are
of specific interest from a value potential for the Texas East Zone. These Texas
East intersections represent the successful targeting and interpreted extension
of mineralization below historical high-grade rib sampling in the Sonneman level
from the 1980s (See Figure 1). (See Thunder Mountain Gold news release, dated;
January 27, 2020).

The 2020 drill program intersected mineralization extending the Texas Zone
further down dip of historical drilling and the exposures in the underground
development. Texas Zone mineralization is now interpreted to continue from the
collar of the old Texas Shaft some 1,150 feet (350 meters) down dip to the
SM20-050 intercept. Both the Texas West and East zones remain open to depth (See
Figure 1). Table 3 further below provides drill hole azimuth, dip, end of hole
length and collar coordinates for each of the reported drill holes.

Table 1. Analysis and assay results of West Texas Zone

Borehole ID Core Zone Cu % Ag Au Pb % Zn %

    & Interval       (ft)   (ft)  Interval (ft)       opt   opt
  TEXAS WEST ZONE
     SM20-028       198.95 234.55     35.60     2.56 7.586 0.008 0.1  0.13

     SM20-030       54.89  82.09      27.20     1.13 3.649 0.003 0.02 0.26

     SM20-031       136.09 140.58     4.49      1.56 8.940 0.012 1.09 2.21

     SM20-033       110.79 119.49     8.69      2.77 7.330 0.011 0.03 0.15

     SM20-036       112.40 143.70     31.30     0.99 9.243 0.007 0.39 2.15

     SM20-038       106.00 131.00     25.00     1.64 8.152 0.022 0.86 0.55
         INCLUDING: 106.00 122.97     16.96     2.23 9.855 0.030 1.12 0.77

     SM20-041
    INTERVAL 1:     63.71  73.88      10.17     1.29 5.177 0.003 0.07 0.04
    INTERVAL 2:     104.20 109.19     4.99      0.44 4.947 0.069 0.91 1.99




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Drill Hole ID, Zone   From       To         Core       Cu %     Ag       Au     Pb %  Zn %
    & Interval        (ft)      (ft)    Interval (ft)          opt      opt
     SM20-042
    INTERVAL 1:       58.99     65.19       6.20       1.92   3.004    0.002    0.01  0.03
    INTERVAL 2:       78.08     83.99       5.91       1.06   3.325    0.002    0.03   0.1

     SM20-043         (ft)      (ft)    Interval (ft)          opt      opt
    INTERVAL 1:      131.00    154.00       23.00      2.84   5.294    0.006    0.01  0.29
    INCLUDING:       131.00    146.69       15.68      3.81   7.125    0.005    0.01  0.07

     SM20-049
    INTERVAL 1:      106.89    120.64       13.75      1.82   2.608    0.002    0.01  0.18
    INTERVAL 2:      147.31    151.25       3.94       2.42   4.025    0.004    0.01  0.07

Analytical and assay results are pending for drill holes SM20-32, 34, 35, 37, 39, 40, 44-48 and 51


Note: Reported widths are drilled core lengths as true widths are unknown at
this time. It is estimated based upon current data that true widths might range
between 60-80% of the drilled intersection. A nominal cut-off grade of 0.5% Cu
has been applied to determine the boundaries of the intersections for this
skarn-hosted mineralization with no more than 1.22 meters of internal dilution.
*A nominal cut-off grade of 4.375 opt (150 g/t) Ag has been applied to this
intersection. Table 3 below documents; Drill Hole Azimuth, Dip, end of hole
length, and Collar Coordinates (Note: See details below in QA/QC section).

Table 2. Analysis and assay results of East Texas Zone

Borehole ID, Core Zone Zn % Ag Au Pb % Cu %

    & Interval        (ft)      (ft)    Interval (ft)            opt      

opt

TEXAS EAST AREA

SM20-029 202.20 206.59 4.40 19.67 6.688 0.111 3.94 0.25

SM20-043

INTERVAL 2: 185.47 200.89 15.42 6.19 4.918 0.060 0.71 0.39

OF WHICH: 185.47 196.49 11.02 8.65 6.361 0.071 0.9 0.52

SM20-050

INTERVAL 1: 151.84 159.42 7.58 0.1 4.255 0.005 0.01 2.91

INTERVAL 2: 162.89 190.29 27.40 4.17 5.682 0.118 0.78 0.54

Analytical and assay results are pending for drill holes SM20-32, 34, 35, 37, 39, 40, 44-48 and 51


Note: Reported widths are drilled core lengths as true widths are unknown at
this time. It is estimated based upon current data that true widths might range
between 60-80% of the drilled intersection. Intervals cut-offs are based upon
visual contacts of massive sulphide units with no more than 0.80 meters of
internal skarn. For hole SM20-050 Interval 1. a nominal cut-off grade of 0.5% Cu
has been applied to determine the boundaries of the intersections for this
skarn-hosted mineralization. Table 3 below documents; Drill Hole Azimuth, Dip,
end of hole length, and Collar Coordinates (Note: See details below in QA/QC
section).

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Figure 1: 3D perspective view tilted 200 to the north-northeast, with hole locations for SM20-028 to SM20-050

                               [[Image Removed]]

Table 3: Borehole azimuth, dip, end-of-hole length and collar coordinates

Hole ID Azimuth Dip Hole End East (ft) North Elev.

          Degree  Degree Length (ft)            (ft.)   (ft.)
SM20-028    90      15       246     2311764    393645 6866.77
SM20-029    126    -12       325     2311764    393645 6866.77
SM20-030    95     -30       125     2311764    393645 6866.77
SM20-031    110    -14       179     2311764    393645 6866.77
SM20-032*   105    -64       144     2311764    393645 6866.77
SM20-033    115    -30       205     2311764    393645 6866.77
SM20-034*   80      15       217     2311764    393645 6866.77
SM20-035*   105     14       78      2311764    393645 6866.77
SM20-036    105    -14       269     2311764    393645 6866.77




                                       24

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Hole ID Azimuth Dip Hole End East (ft) North Elev.

          Degree  Degree Length (ft)            (ft.)   (ft.)
SM20-037*   100    -14       225     2311764    393645 6866.77
SM20-038    110    -30       185     2311764    393645 6866.77
SM20-039*   122     -8       350     2311764    393645 6866.77
SM20-040*   105    -29       200     2311764    393645 6866.77
SM20-041    110    -40       185     2311764    393645 6866.77
SM20-042    87     -62       204     2311764    393645 6866.77
SM20-043    124    -20       399     2311764    393645 6866.77
SM20-044    124    -20       154     2311764    393645 6866.77
SM20-045*    0     -55       108     2311764    393645 6866.77
SM20-046*   127    -37       305     2311764    393645 6866.77
SM20-047*   60     -80       173     2311764    393645 6866.77
SM20-048*   135    -36       275     2311764    393645 6866.77
SM20-049    155    -60       205     2311764    393645 6866.77
SM20-050    150    -42       276     2311764    393645 6866.77
SM20-051*   170    -49       404     2311760    393643 6866.07

*Results pending for this drill.

South Mountain Phase I Drilling Under BeMetals Option Agreement

The principal objectives of the Phase 1 work plan at South Mountain were to test
for potential extensions of the mineralized zones and confirm the grade
distribution of the current polymetallic mineral resource estimate. The Company
has now successfully completed the phase 1 program comprised of 20 underground
drill holes for a total of approximately 2,290 meters. Geological logging and
sampling of all drill holes have now been completed with all analytical results
received. These results have been compiled into the Project's geological
database and were used to design the phase 2 drilling program for 2020.
Following the phase 2 drilling program, all new results were integrated into an
updated mineral resource estimation for the Project and announced during the
second quarter of 2021.

Table 1. BeMetal Assay and Assay Results for the Phase 1 Drilling Program

Drill Hole ID, Zone From  To    Core           Ag  Au
& Interval          (m)   (m)   Interval Zn %  g/t g/t  Pb % Cu %
                                (m)
DMEA Zone
SM19-002
Interval 1          46.88 57.39 10.51    17.81 226 2.41 1.59 0.16
Interval 2          67.85 71.63 3.78     5.45  145 8.39 0.58 0.15
Interval 3          85.83 96.39 10.56    11.42 123 4.43 0.36 0.52

SM19-003
Interval 1          51.18 75.35 24.17    11.12 267 3.44 3.75 0.29
Including           51.18 60.78 9.60     11.74 437 5.99 8.68 0.38
Including           62.09 75.35 13.26    11.77 169 1.88 0.54 0.25
Interval 2          77.60 81.24 3.64     9.74  331 1.94 1.11 0.34




                                       25

————————————————– ——————————

SM19-005 75.13 86.37 11.23 7.97 128 1.20 0.91 0.24

SM19-006 28.01 43.71 15.70 21.27 147 8.04 0.77 0.30

SM19-007 26.97 39.17 12.20 18.16 122.6 4.41 1.55 0.16

SM19-014

Interval 1 105.31 120.40 15.09 9.59  127.1 1.50 0.69 0.28
Interval 2 138.07 143.88 5.81  4.88  76.9  2.55 0.21 0.12
Interval 3 155.17 158.95 3.78  14.49 145.5 0.37 0.25 0.48
Interval 4 184.40 189.56 5.15  0.28  79.9  2.08 0.15 0.06
Interval 5 250.65 258.94 8.29  8.11  178.7 0.48 0.57 1.73
Interval 6 266.33 268.16 1.83  1.32  158.9 2.56 0.56 0.11
Texas Zone
SM19-010
Interval 1 24.41  31.62  7.21  4.37  155.2 0.13 0.03 2.07
Interval 2 53.11  63.15  10.04 0.40  135.1 0.07 0.01 1.75


* Note: 1.00 meter (m) is equal to 3.28 feet (ft). One gram per tonne (g/t) is
equal to 0.032 ounces per ton (oz/t, or o.p.t.)
Table 2 below shows the latest results received from holes SM19-016, SM19-017
and SM19-018.

Table 2. Drill Holes SM19-016, SM19-017 and SM19-018: Analytical and Assay
Results

Drill Hole ID: Zone From   To     Core           Ag    Au
& Interval          (m)    (m)    Interval Zn %  g/t   g/t  Pb % Cu %
                                  (m)
DMEA Zone
SM19-016
Interval 1          112.33 132.05 19.72†   0.07  8.39  1.52 0.01 0.002
Interval 2          136.55 146.64 10.09    3.15  151.3 1.68 0.66 0.22
Interval 3          158.27 163.59 5.32†    0.59  46.8  1.81 0.11 0.04
Interval 4          184.18 188.64 4.47†    5.04  482.0 4.27 5.80 0.43
Interval 5          227.32 230.83 3.51     8.85  136.2 0.17 1.25 1.67
MB4 Target Zone
SM19-017
Interval 1          1.37   5.23   3.86*    12.90 314.1 0.26 0.88 1.08
Interval 2          16.32  24.08  7.76*    10.23 91.4  0.07 0.36 0.55
SM19-018
Interval 1          0.00   18.62  18.62*   5.15  73.2  0.11 0.02 0.41
Including           8.53   18.62  10.09*   8.06  97.0  0.15 0.02 0.68


Note: Reported widths in tables 1 & 2 are drilled core lengths as true widths
are unknown at this time. It is estimated based upon current data that true
widths might range between 60-80% of the drilled intersection. For drill holes
SM19-017* and SM19-018* true widths are unknown as these are the first drill
intersections of the MD4 target. Intervals cut offs are based upon visual
contacts of massive sulfide units with no more than 1.75 meters of internal
skarn. For SM19-010 a nominal 0.5% copper cut off has been applied to determine
the boundaries of the intersections for this skarn hosted mineralization with no
more than 1.4m of internal dilution. For SM19-016† (intervals 1, 3 and 4) a
nominal 0.46 g/t gold cut off has been applied to determine the boundaries of
the intersections with no internal dilution. For SM19-017 & 018 a nominal 2.4%
zinc cut off has been applied to determine the boundaries of the intersections
for this skarn hosted mineralization with no more than 2m of internal
dilution. (Note: See details below in QA/QC section). 1.00 meter (m) is equal to
3.28 feet (ft). One gram per tonne (g/t) is equal to 0.032 ounces per ton (oz/t,
or o.p.t.).

The above drill holes returned significant intersections of both massive sulfide
and skarn styles of mineralization. Important sulfide minerals are pyrrhotite,
sphalerite, galena, arsenopyrite and chalcopyrite. During the planned phase 3
campaign at South Mountain, the Company will carry out mineralogy and
metallurgical test work studies to confirm historical other previous high-grade
results, which will be included in the PEA.

                                       26

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                               [[Image Removed]]

Figure 1: 3D Perspective View inclined at 20 degrees looking north-north-east,
showing locations of rib-sampling, priority target zones, and the phase 1 drill
holes and highlighted the recent SM19-016, SM19-017 and SM19-018

Underground core drilling was conducted to extend and upgrade the South Mountain
resource - testing the continuity and down-dip extensions of the high-grade
polymetallic massive sulfide zones. The Company and BeMetals completed
additional core drilling in the DMEA and Laxey zones to complete the
confirmation and extensional drilling in 2021. The Company also retrieved bulk
samples for metallurgical test work.

More than 15,000 feet (4,500 meters) have been drilled at South Mountain and
included in the model. The South Mountain historic ore zones remain open
down-dip on the zones encountered. The successful drilling and development work
prove that the South Mountain resource continues to grow with potential to
increase the resource substantially.

                                       27

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                               [[Image Removed]]

Figure 2: Plan view of the Sonneman and Laxey levels, South Mountain deposit,

   showing locations of rib-sampling, priority target zones, and drill holes
                        SM19-016, SM19-017 and SM19-018

                                       28
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                               [[Image Removed]]

                Figure 3: Plan View of Sonneman & Laxey Levels,
             showing locations of previously reported rib sampling

QUALITY ASSURANCE AND QUALITY CONTROL PROCEDURES

The project employs a rigorous QC/QA program that includes blanks, duplicates
and appropriate certified standard reference material. All samples are
introduced into the sample stream prior to sample handling/crushing to monitor
analytical accuracy and precision. The insertion rate for the combined QA/QC
samples is 10 percent or more depending upon batch sizes. ALS Global completed
the analytical work with the core samples processed at their preparation
facility in Reno, Nevada, U.S.A. All analytical and assay procedures are
conducted in the ALS facility in North Vancouver, BC. The samples are processed
by the following methods as appropriate to determine the grades; Au-AA23-Au 30g
fire assay with AA finish, ME-ICP61-33 element four acid digest with ICP-AES
finish, ME-OG62-ore grade elements, four acid with ICP-AES finish, Pb-OG62-ore
grade Pb, four acid with ICP-AES finish, Zn-OG62-ore grade Zn, four acid digest
with ICP-AES finish, Ag-GRA21-Ag 30g fire assay with gravimetric finish.

                                       29

————————————————– ——————————

Gold Breach Target

In 2010, five holes were drilled by Thunder Mountain Gold in the Gold Breccia
anomaly for a total footage of 3,530 feet, and 705 total samples taken every
five feet of drill hole. Of the 705 samples taken, 686 samples contained
anomalous gold, or 97% of the samples. The highest-grade intercept ran 0.038
ounce per ton. HRC reviewed the reports done on the breccia completed by both
Kinross and Newmont; of note was Newmont's comparison of the geology to the
Battle Mountain Complex in Nevada.

The Technical Report was authored by Ms. J.J. Brown, P.G., SME-RM, Mr. Jeffrey
Choquette, P.E., and Mr. Randy Martin, SME-RM, all of Hard Rock Consulting, each
of whom is an independent qualified person for the purposes of NI 43-101 The NI
43-101 Technical Report has an effective date of April 7, 2018, and has been
filed in Canada on SEDAR in accordance with NI 43-101. The Report can be
reviewed on the Company`s website at www.thundermountaingold.com.

note to United States investors regarding estimates of measured, indicated and inferred resources.

Information concerning our mining properties has been prepared in accordance
with the requirements of subpart 1300 of Regulation SK, which first became
applicable to us for the fiscal year ended December 31, 2021. These requirements
differ significantly from the previously applicable disclosure requirements of
SEC Industry Guide 7. Among other differences, subpart 1300 of Regulation S-K
requires us to disclose our mineral resources, in addition to our mineral
reserves, as of the end of our most recently completed fiscal year both in the
aggregate and for each of our individually material mining properties. You are
cautioned that mineral resources do not have demonstrated economic value.
Mineral resources are subject to further exploration and development, are
subject to additional risks, and no assurance can be given that they will
eventually convert to future reserves. Inferred Resources, in particular, have a
great amount of uncertainty as to their existence and their economic and legal
feasibility. Investors are cautioned not to assume that any part or all of the
Inferred Resource exists or is economically or legally mineable. See Item 1A,
Risk Factors.

Disclosure of the NI-43-101 has been prepared in accordance with the
requirements of Canadian securities laws, including Canadian National Instrument
43-101 ("NI 43-101"). The Highlights of South Mountain NI-43-101 section refers
to "mineral resources," "measured mineral resources," "indicated mineral
resources," and "inferred mineral resources."

Qualified Person - The technical information in this Form 10K has been reviewed
and approved by Larry D. Kornze, (Retired) , Qualified Person, and Director of
Thunder Mountain Gold Inc., and a "Qualified Person" as defined by National
Instrument 43-101 standards.

This property is without known reserves and the proposed program is exploratory
in nature according to Instruction 3 to paragraph (b)(5) of the SEC`s Industry
Guide 7. There are currently no permits required for conducting exploration in
accordance with the Company`s current board approved exploration plan.

Trout Creek Project, Lander County, Nevada

The Trout Creek project is a highly prospective gold exploration target located
along the western flank of the Shoshone Mountain Range in the Reese River Valley
in Lander County, Nevada. The Project is located approximately 155 air miles
northeast of Reno, Nevada, or approximately 20 miles south of Battle Mountain,
Nevada, in Sections 10, 11, 14, 16, 21, 22, 27; T.29N.; R.44E. Mount Diablo
Baseline & Meridian, Lander County, Nevada. Latitude: 40 23' 36" North,
Longitude: 117 00' 58" West. The property is generally accessible year-round by
traveling south from Battle Mountain Nevada on state highway 305, which is
paved.

During the year ended December 31, 2021, the Company made the decision to retain
26 (approximately 520 acres) of the 87 unpatented lode mining claims in the
Trout Creek area. The Company's 26 unpatented mining claims are staked along a
recognizable structural zone in the Eureka-Battle Mountain mineralized gold
trend. The Company paid annual fees to BLM of $4,290 and Lander County $324
fees.

                                       30

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The Trout Creek target is anchored by a regional gravity anomaly on a
well-defined northwest-southeast trending break in the alluvial fill thickness
and underlying bedrock. Previous geophysical work in the 1980s revealed an
airborne magnetic anomaly associated with the same structure, and this was
further verified and outlined in 2008 by Company personnel, with consultation
from Jim Wright - Wright Geophysics using a ground magnetometer. The target is
covered by alluvial fan deposits of generally unknown thickness, shed from the
adjacent Shoshone Range, a fault block mountain range composed of Paleozoic
sediments of both upper and lower plate rocks of the Roberts Mountains thrust.

Wright Geophysics also conducted a ground gravity survey and CSMAT over the
pediment target area and this provided insight into the gravel-bedrock contact
as well as defining the favorable structural setting within the buried bedrock.
An untested drill target was identified under the gravel pediment along these
structures, and the geophysics showed that the bedrock was within 500 feet of
the surface, which is reasonable depth for exploration drilling and potential
mining if a significant mineralization is encountered.

The Company does not plan to carry out any work on the Trout Creek property in 2022, but will instead focus all of its efforts on its Southern Mountain Project.

No environmental permit is currently required for planned exploration work on the property. In the future, a Notice of Intent may be required from the Land Management Office.

Competition

We are an exploration stage company. We compete with other mineral resource
exploration and development companies for financing and for the acquisition of
new mineral properties. Many of the mineral resource exploration and development
companies with whom we compete have greater financial and technical resources
than us. Accordingly, these competitors may be able to spend greater amounts on
acquisitions of mineral properties of merit, on exploration of their mineral
properties and on development of their mineral properties. In addition, they may
be able to afford greater geological expertise in the targeting and exploration
of mineral properties. This competition could result in competitors having
mineral properties of greater quality and interest to prospective investors who
may finance additional exploration and development. This competition could
adversely impact on our ability to finance further exploration and to achieve
the financing necessary for us to develop our mineral properties.

Employees

The Company employs three full-time officers. As part of the BeMetals agreement,
the Company allowed these officers to work on the South Mountain Project on a
consulting arrangement with BeMetals.

Results of operations:

For the three months ended June 30, 2022, the Company recorded a net loss of
$453,580, compared to net income of $191,542, for the same time ending June 30,
2021. Net Loss for the six-month period ended June 30, 2022 was $965,309 for the
same period in 2021 the Net income was $142,320. The decrease in net income for
2022 is primarily due to a reduction in the market value of the Company's
investment in BeMetals stock. For the three and six month periods ended June 31,
2022 the Company recognized an unrealized loss on the investment in BeMetals of
$381,924 and $620,988, respectively. The Company recognized a gain of $163,507
and a loss of $71,011 for the three- and six-month periods ended June 30, 2021.

Three-month period comparisons
The Company recognized $75,000 in management services income for the three-month
periods ended June 30, 2022, and 2021, respectively.

Operating expenses for the three months ending June 30, 2022, of $146,656
decreased from the same respective time period in 2021 by $1,520 or 1%.
Exploration expenses for the three months ended June 30, 2021 decreased by
$1,617 when compared to same period in 2021. Legal and accounting costs
decreased in three-month period ended June 30, 2022 compared to 2021 by $18,152
for a total of $14,454. The decrease in Legal and accounting was associated to
the early closing of the 10-K expenses for the year ended December 31, 2022
compared to 2021. Management and administrative expense increased by $18,536 or
17%. This increase in Management and administration cost was due to the Board of
Directors compensation of $13,650 for the three months ended June 30, 2022.
There were no stock options issued for the three months ended June 30, 2022 and
2021, respectively.

                                       31
--------------------------------------------------------------------------------
Six-month period comparisons
The Company recognized $150,000 in total revenue for the six-month period ended
on June 30, 2022 compared with total revenue of $400,000 for the same period
ended June 30, 2021, a decrease of $250,000 or 63%. Management services revenue
from BeMetals remained the same at $75,000 in both quarters; however, for the
quarter ended June 30, 2021 the Company recognized a $250,000 gain on the sale
of mineral properties under the terms of the BeMetals Option Agreement. No gain
was recognized for the same period in 2022. The final cash payment under the
BeMetals Option Agreement was received in third quarter of 2021.

Operating expenses for the six months ending June 30, 2022, of $494,419
increased from the same respective time period in 2021 by $206,245 or 72%.
Exploration expenses decreased by $5,462 or 71% when compared to same period in
2021. Legal and accounting costs increased by $30,585 or 56% for a total of
$85,092. Management and administrative expense increased by $181,846 or 81%
principally due to stock compensation of $158,341 for stock options issued to
our officers and directors on March 21, 2022. There were no stock options issued
during the six months ended June 31, 2021.

The consolidated financial statements for the six-months ended June 30, 2022
have been prepared under the assumption that we will continue as a going
concern. Such assumption contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown in the
consolidated financial statements as of June 30, 2022, we have sufficient cash
reserves to cover normal operating expenditures for the following 12 months.

Cash and capital resources:

The consolidated financial statements for the year ended June 30, 2022 have been
prepared under the assumption that we will continue as a going concern. Such
assumption contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the consolidated
financial statements for the three-month period ended June 30, 2022, we have
sufficient cash reserves to cover normal operating expenditures for the
following 12 months.

The liquidity of the Company was enhanced on February 27, 2019 when the Company
entered the BeMetals Option Agreement with BeMetals Corp., and BMET USA, a
wholly owned subsidiary of BeMetals. Under the terms of the BeMetals Option
Agreement, BMET USA will be entitled to purchase 100% of the issued and
outstanding shares of SMMI from TMRI, both wholly owned subsidiaries of the
Company. The term of the agreement is for two years with BeMetals completing a
preliminary economic assessment ("PEA") completed by a mutually agreed
third-party engineering firm. Over its term, this agreement requires cash
payments to the Company of $1,350,000; $1,100,000 in cash and $250,000 in
exchange for shares of the Company's common stock. Through June 30, 2022, cash
proceeds of $1,100,000 and $250,000 in exchange for shares of the Company's
common stock have been received. BeMetals also agreed to pay the Company $25,000
per month for management services. In the event that BeMetals decides not to
proceed with the South Mountain Project, BeMetals will not be obligated to make
any additional payments.

The Company has historically incurred losses, however, under the BeMetals Option
Agreement, the Company now has a recurring source of revenue, and its ability to
continue as a going concern is no longer dependent on equity capital raises and
borrowings. However, the Company believes it has the ability to raise capital in
order to fund its future exploration and working capital requirements if
necessary.

Potential additional sources of cash, include additional external debt, the sale
of shares of our stock, or alternative methods such as mergers or sale of
8,000,000 BeMetals common stock shares held by the company. (See South Mountain
Project above), No assurances can be given, however, that we will be able to
obtain any of these potential sources of cash.

                                       32

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Our plans for the long-term continuation as a going concern include financing
our future operations through sales of our common stock and/or debt and the
potential exploitation of our mining properties. Our plans may also, at some
future point, include the formation of mining joint ventures with senior mining
company partners on specific mineral properties whereby the joint venture
partner would provide the necessary financing in return for equity in the
property. In addition to the BeMetals Corp. Option Agreement, we believe that
the Company will be able to meet its financial obligations because of the
following:

º Walk July 27, 2022we have had $896,360 money in our bank accounts.

º We do not include in this consideration the option payments mentioned

below.

º The management undertakes to manage expenses of all kinds so as not to exceed the

the Company’s available cash at any time, now or in the future

coming.

º The Company will also consider other sources of funding, including

potential mergers, the sale of all or part of BeMetals Corp.

(TSX-V: BMET) common shares beneficially owned and/or additional lease

of its other exploration property.

For the six-month period ended June 30, 2022 the Company reported a net cash
decrease of $270,455, compared to a net cash increase of $756,245 for the same
period in 2021. The Company reported net cash used by operating activities of
$232,455 compared to cash used by operating activities of $103,504 for the same
period in 2021. The Company did not have any cash provided or used by investing
for the period ended June 30, 2022 compared to cash provided by investing
activities of $899,557 for the same period in 2021. In 2021 the Company received
cash from investing activities of $250,000 from the sale of mineral interests
forthe Tranche 5 payment, pursuant to the BeMetals Option Agreement, and
$649,557 proceeds from sale of 2,000,000 shares of BeMetals common shares. The
Company reported cash used in financing activities of $38,000 and $39,808 for
the period ended June 30, 2022 and 2021, respectively, related to the repayment
of related party notes payable to officer and directors of the Company.

Our future liquidity and capital requirements will depend on many factors,
including timing, cost and progress of our exploration efforts, our evaluation
of, and decisions with respect to, our strategic alternatives, and costs
associated with the regulatory approvals. If it turns out that we do not have
enough cash to complete our exploration programs, we will attempt to raise
additional funds from a public offering, a private placement, mergers, farm-outs
or loans.

Additional financing may be required in the future to fund our planned
operations. We do not know whether additional financing will be available when
needed or on acceptable terms, if at all. If we are unable to raise additional
financing, when necessary, we may have to delay our exploration efforts or any
property acquisitions or be forced to cease operations. Collaborative
arrangements may require us to relinquish our rights to certain of our mining
claims.

Contractual Obligations

During 2008 and 2009, three lease arrangements were made with landowners that
own land parcels adjacent to the Company's South Mountain patented and
unpatented mining claims. The leases were for a seven-year period, with options
to renew, with annual payments (based on $20 per acre) listed in the following
table. The leases have no work requirements.

                                                      Payments due by period
Contractual obligations                         Less than      2-3        4-5       More than
                                     Total*      1 year       years      years       5 years
Acree Lease (yearly, June)(1)      $  3,390   $     3,390          -          -   $         -
Lowry Lease (yearly,
October)(1)(2)                     $ 22,560   $    11,280   $ 11,280          -   $         -
OGT LLC(3)                         $ 25,000   $     5,000   $ 10,000   $ 10,000   $         -
Total                              $ 50,950   $    19,670   $ 21,280   $ 10,000   $         -


(1) Amounts shown are for the lease periods years 15 through 16, a total of 2
years that remains after 2021, the lease was extended an additional 10 years at
$30/acre after 2014.
(2) The Lowry lease has an early buy-out provision for 50% of the remaining
amounts owed in the event the Company desires to drop the lease prior to the end
of the first seven-year period.
(3) OGT LLC, managed by the Company's wholly owned subsidiary SMMI, receives a
$5,000 per year payment for up to 10 years, or until a $5 million capped NPI
Royalty is paid.

                                       33

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Critical accounting policies

We have identified our critical accounting policies, the application of which
may materially affect the financial statements, either because of the
significance of the financials statement item to which they relate, or because
they require management's judgment in making estimates and assumptions in
measuring, at a specific point in time, events which will be settled in the
future. The critical accounting policies, judgments and estimates which
management believes have the most significant effect on the financial statements
are set forth below:

a) Estimates. 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 increase, these
judgments become even more subjective and complex. Although we believe that our
estimates and assumptions are reasonable, actual results may differ
significantly from these estimates. Changes in estimates and assumptions based
upon actual results may have a material impact on our results of operation
and/or financial condition.

b) Stock-based Compensation. The Company records stock-based compensation in
accordance with ASC 718, "Compensation - Stock Compensation" using the fair
value method. 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
instrument issued, whichever is more reliably measurable.

c) Income Taxes. We have current income tax assets recorded in our financial
statements that are based on our estimates relating to federal and state income
tax benefits. Our judgments regarding federal and state income tax rates, items
that may or may not be deductible for income tax purposes and income tax
regulations themselves are critical to the Company's financial statement income
tax items.

d) Investments. In a joint venture where the Company holds more than 50% of the
voting interest and has significant influence, the joint venture is consolidated
with the presentation of non-controlling interest. In determining whether
significant influences exist, the Company considers its participation in
policy-making decisions and its representation on the venture's management
committee.

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