10-Q

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2013

o 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. 000-51718

COLORADO GOLDFIELDS INC.

 (Exact name of small business issuer as specified in its charter)

Nevada	20-0716175
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

10920 W. Alameda Avenue, Suite 201, Lakewood, Colorado, 80226, USA

 (Address of principal executive offices)

303-984-5324

 (Issuer's telephone number, including area code)

N/A

 (Former Name, Former Address if Changed Since last Report)

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer,” "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer  o
Non-accelerated filer o	Smaller reporting company þ

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PROCEEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Shares Outstanding at January 29, 2014
Class A Common Stock, $0.001 Par Value	356,662,566
Class B Common Stock (Restricted), $0.001 Par Value	490,371,533

TABLE OF CONTENTS

			Page
PART I—FINANCIAL INFORMATION			3
	Item 1. Financial Statements.		3
		Balance Sheets	3
		Statements of Operations	4
		Statements of Cash Flows	5
		Statements of Stockholders' Equity (Deficit)	6
		Notes to the Unaudited Financial Statements	7
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Item 3. Quantitative and Qualitative Disclosures About Market Risk.		16
	Item 4. Controls and Procedures.		23
			23
PART II—OTHER INFORMATION
	Item 1. Legal Proceedings.		24
	Item 1A. Risk Factors.		26
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		28
	Item 3. Defaults Upon Senior Securities.		28
	Item 4. Mine Safety Disclosures.		28
	Item 5. Other Information.		28
	Item 6. Exhibits and Financial Statement Schedules		29
	Exhibit Index
CERTIFICATIONS

2

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Colorado Goldfields Inc. (An Exploration Stage Company)

Balance Sheets

	November 30,			August 31,
	2013			2013
	(unaudited)
ASSETS
Current Assets
Cash	$	2,124		$	15,092
Prepaid expenses and other		-			48,558
Total Current Assets		2,124			63,650
Non-Current Assets
Property, plant and equipment, net (Note 3)		1,435,951			1,436,206
Mining rights and claims (Note 4)		150,000			152,604
Restricted cash (Note 3)		515,428			515,428
Deferred financing costs		23,996			43,790
Other		4,743			4,743
Total Non-Current Assets		2,130,118			2,152,771
Total Assets	$	2,132,242		$	2,216,421
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	601,540		$	379,474
Accrued liabilities		844,998			655,075
Convertible notes, less unamortized discount of $262,868
and $386,601 (Note 7)		392,525			284,856
Derivative liabilities (Note 8)		1,188,336			1,424,115
Promissory notes payable, including accrued interest (Note 6)		122,930			119,248
Notes payable, including accrued interest - related parties (Note 5)		361,831			357,258
Mortgage notes payable, including accrued interest (Note 3)		191,317			200,578
Total Current Liabilities		3,703,477			3,420,604
Non-Current Liabilities
Asset retirement obligation		515,500			515,500
Total Non-Current Liabilities		515,500			515,500
Total Liabilities		4,218,977			3,936,104
Commitments and Contingencies (Note 10)
Stockholders' Deficit (Note 9)
Class A common stock, 1,000,000,000 shares authorized, $0.001 par value;
356,662,566 and 47,366,656 issued and outstanding, respectively		356,663			47,367
Class B common stock, 500,000,000 shares authorized, $0.001 par value;
490,371,533 shares issued and outstanding, respectively		-			-
Additional paid in capital		28,010,100			28,050,044
Donated capital		29,250			29,250
Deficit accumulated during the exploration stage		(30,482,748	)		(29,846,344	)
Total Stockholders' Deficit		(2,086,735	)		(1,719,683	)
Total Liabilities and Stockholders' Deficit	$	2,132,242		$	2,216,421

The accompanying notes are an integral part of these financial statements

3

Colorado Goldfields Inc. (An Exploration Stage Company)

Statements of Operations

(Unaudited)

							Accumulated
							from February 11,
	For the Three			For the Three			2004
	Months Ended			Months Ended			(Date of Inception)
	November 30, 2013			November 30, 2012			to November 30, 2013
Revenue	$	-		$	-		$	-
Operating expenses
Donated rent		-			-			9,750
Donated services		-			-			19,500
General and administrative		248,608			418,968			17,134,295
Mineral property and exploration costs		77,618			782,342			4,646,766
Professional fees		124,089			41,468			2,269,161
Total operating expenses		(450,315	)		(1,242,778	)		(24,079,472	)
Other income (expense)
Other income		1,350			2,950			196,120
Interest income		-			-			33,781
Gain (loss) on derivative liabilities		83,333			98,310			647,441
Interest expense		(270,772	)		(361,169	)		(7,280,618	)
Total other expense		(186,089	)		(259,909	)		(6,403,276	)
Net Loss	$	(636,404	)	$	(1,502,687	)	$	(30,482,748	)
Net Loss Per Common Share - Basic and Diluted		*		$	(40.95	)
Weighted Average Number of Common Shares Outstanding		184,865,298			36,695

*Amount is less than $(0.01) per share.

The accompanying notes are an integral part of these financial statements

4

Colorado Goldfields Inc. (An Exploration Stage Company)

Statements of Cash Flows

(Unaudited)

							Accumulated from
	For the Three			For the Three			February 11, 2004
	Months Ended			Months Ended			(Date of Inception) to
	November 30, 2013			November 30, 2012			November 30, 2013
Cash Flows Used in Operating Activities:
Net loss	$	(636,404	)	$	(1,502,687	)	$	(30,482,748	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Donated services and rent		-			-			29,250
Amortization of debt discount and deferred financing costs		207,455			336,529			6,496,584
Depreciation and amortization		255			1,153			151,925
Gain on derivative liabilities		(83,333	)		(98,310	)		(647,441	)
Impairment of mining rights		2,604			21,910			470,000
Stock issued for services		48,558			251,110			11,550,935
Stock issued for Champion and Silver Wing Mines		-			-			185,000
Stock-based compensation - options		-			-			899,303
Accrued interest		62,062			23,411			628,000
Accretion expense on asset retirement obligation		-			-			191,635
Gain on sale of property, plant and equipment		-			-			(92,792	)
Change in operating assets and liabilities:
Increase in restricted cash		-			-			(515,428	)
Increase in prepaid expenses and other		-			-			(91,062	)
Increase in accounts payable		222,066			771,552			3,615,410
Increase in accrued liabilities		166,769			149,250			2,923,796
Increase in other assets		-			-			(4,743	)
Net cash used in operating activities		(9,968	)		(46,082	)		(4,692,376	)
Cash Flows from Investing Activities:
Proceeds from sale of property, plant and equipment		-			-			240,632
Acquisition of property, plant and equipment					(43,805	)		(764,602	)
Net cash used in investing activities		-			(43,805	)		(523,970	)
Cash Flows from Financing Activities:
Advances received		-			-			405,733
Repayment of advances		-			-			(405,733	)
Proceeds from notes from related parties		-			-			581,452
Repayment of advances from related party		-			-			(20,596	)
Proceeds from note payable		-			-			124,000
Repayment of notes payable		-			(3,166	)		(702,819	)
(Cost) proceeds from issuance of convertible debt		(3,000	)		105,000			2,471,297
Loan acquisition costs					(13,500	)		(293,928	)
Proceeds from exercise of warrants		-			-			570
Net proceeds from issuance of common stock		-			-			3,058,494
Net cash (used in) provided by financing activities		(3,000	)		88,334			5,218,470
(Decrease) increase in cash		(12,968	)		(1,553	)		2,124
Cash - Beginning of Period		15,092			6,093			-
Cash  - End of Period	$	2,124		$	4,540		$	2,124
Supplemental Disclosures:
Interest paid	$	909		$	999		$	103,094
Non-cash investing and financing activities:
Exchange of accounts payable and accrued liabilities for debt	$	-		$	-		$	246,036
Issuance of common stock to satisfy accounts payable	$	-		$	80,493		$	2,180,268
Issuance of common stock to satisfy accrued liabilities	$	-		$	125,400		$	2,102,682
Issuance of common stock for prepaid expenses	$	-		$	-		$	550,159
Issuance of common stock for mining rights	$	-		$	62,500		$	620,000
Issuance of common stock for work commitment	$	-		$	660,834		$	660,834
Exchange of convertible debt for common shares	$	269,352		$	414,721		$	6,911,379
Exchange of mortgage payable for convertible debt	$	15,000		$	-		$	360,984
Exchange of property, plant and equipment for
accounts payable	$	-		$	-		$	2,750
Forgiveness of related party debt and accrued interest	$	-		$	-		$	288,361
Change in estimate of asset retirement obligation	$	-		$	-		$	176,135
Acquisition of land and building:
Cash paid	$	-		$	-		$	250,677
Mortgage note given to seller	$	-		$	-		$	650,000
Asset retirement obligation assumed	$	-		$	-		$	500,000
Assets acquired	$	-		$	-		$	1,400,677

The accompanying notes are an integral part of these financial statements

5

Colorado Goldfields Inc. (An Exploration Stage Company)

Statements of Stockholders' Equity (Deficit)

From February 11, 2004 (Date of Inception) to November 30, 2013

														Deficit
														Accumulated			Total
	Class A				Class B				Additional					During the			Stockholders'
	Common Stock				Common Stock				Paid in			Donated		Exploration			(Deficit)
	Shares		Amount		Shares		Amount		Capital			Capital		Stage			Equity
Balances - February 11, 2004 (Date of inception)		-	$	-		-	$	-	$	-		$	-	$	-		$	-
Issuance of common stock for cash		21		-		-		-		2,500			-		-			2,500
Donated services and rent		-		-		-		-		-			4,500		-			4,500
Net loss		-		-		-		-		-			-		(5,898	)		(5,898	)
Balances - August 31, 2004		21	$	-		-	$	-	$	2,500		$	4,500	$	(5,898	)	$	1,102
Issuance of common stock for cash		25		-		-		-		53,750			-		-			53,750
Donated services and rent		-		-		-		-		-			9,000		-			9,000
Net loss		-		-		-		-		-			-		(35,319	)		(35,319	)
Balances - August 31, 2005		46	$	-		-	$	-	$	56,250		$	13,500	$	(41,217	)	$	28,533
Donated services and rent		-		-		-		-		-			9,000		-			9,000
Net loss		-		-		-		-		-			-		(36,148	)		(36,148	)
Balances - August 31, 2006		46	$	-		-	$	-	$	56,250		$	22,500	$	(77,365	)	$	1,385
Donated services and rent		-		-		-		-		-			6,750		-			6,750
Net loss		-		-		-		-		-			-		(300,193	)		(300,193	)
Balances - August 31, 2007		46	$	-		-	$	-	$	56,250		$	29,250	$	(377,558	)	$	(292,058	)
Issuance of common stock for cash (net of offering costs
of $282,231)		4		-		-		-		3,002,244			-		-			3,002,244
Shares issued for services		4		-		-		-		869,739			-		-			869,739
Stock-based compensation - options		-		-		-		-		895,209			-		-			895,209
Net loss		-		-		-		-		-			-		(3,721,021	)		(3,721,021	)
Balances - August 31, 2008		54	$	-		-	$	-	$	4,823,442		$	29,250	$	(4,098,579	)	$	754,113
Shares issued for services		148		-		-		-		4,241,283			-		-			4,241,283
Issuance of common stock to satisfy accounts payable		12		-		-		-		370,015			-		-			370,015
Stock-based compensation - options		-		-		-		-		4,094			-		-			4,094
Stock issued to beneficial owners of Class A Common Stock		-		-		35,732,285		-		-			-		-			-
Forgiveness of related party debt and accrued interest		-		-		-		-		288,361			-		-			288,361
Net loss		-		-		-		-		-			-		(5,281,857	)		(5,281,857	)
Balances - August 31, 2009		214	$	-		35,732,285	$	-	$	9,727,195		$	29,250	$	(9,380,436	)	$	376,009
Shares issued for services		368		-		-		-		1,950,760			-		-			1,950,760
Issuance of common stock to satisfy accounts payable		58		-		-		-		343,828			-		-			343,828
Shares issued for mining rights		50		-		-		-		407,500			-		-			407,500
Shares issued for convertible debt		19		-		-		-		107,136			-		-			107,136
Stock issued to beneficial owners of Class A Common Stock		-		-		5,012,068		-		-			-		-			-
Net loss		-		-		-		-		-			-		(3,660,418	)		(3,660,418	)
Balances - August 31, 2010		709	$	-		40,744,353	$	-	$	12,536,419		$	29,250	$	(13,040,854	)	$	(475,185	)
Shares issued for services		1,207		1		-		-		2,424,286			-		-			2,424,287
Issuance of common stock to satisfy accounts payable		233		-		-		-		459,024			-		-			459,024
Shares issued for convertible debt		859		1		-		-		2,771,501			-		-			2,771,502
Shares issued for mining rights		100		-		-		-		150,000			-		-			150,000
Stock issued to officers		-		-		449,623,244		-		-			-		-			-
Class B warrants exercised and shares issued		-		-		3,936		-		570			-		-			570
Net loss		-		-		-		-		-			-		(6,163,394	)		(6,163,394	)
Balances - August 31, 2011		3,108	$	2		490,371,533	$	-	$	18,341,800		$	29,250	$	(19,204,248	)	$	(833,196	)
Shares issued for services		2,236		2		-		-		999,795			-		-			999,797
Issuance of common stock to satisfy accounts payable		1,026		1		-		-		450,206			-		-			450,207
Issuance of common stock to satisfy accrued liabilities		1,265		1		-		-		682,559			-		-			682,560
Shares issued for convertible debt		3,660		4		-		-		1,892,840			-		-			1,892,844
Net loss		-		-		-		-		-			-		(4,299,576	)		(4,299,576	)
Balances - August 31, 2012		11,295	$	10		490,371,533	$	-	$	22,367,200		$	29,250	$	(23,503,824	)	$	(1,107,364	)
Shares issued to round fractional shares due to stock split		361		-		-		-		-			-		-			-
Shares issued for services		4,967,177		4,967		-		-		969,039			-		-			974,006
Shares issued for mining rights		500		1		-		-		62,499			-		-			62,500
Shares issued for Champion and Silver Wing Mines		172,000		172		-		-		184,828			-		-			185,000
Issuance of common stock to satisfy accounts payable		2,077,602		2,078		-		-		555,116			-		-			557,194
Issuance of common stock to satisfy accrued liabilities		27,988,748		27,989		-		-		1,392,133			-		-			1,420,122
Issuance of common stock for work commitment		12,795		13		-		-		660,821			-		-			660,834
Shares issued for convertible debt		12,136,178		12,137		-		-		1,858,408			-		-			1,870,545
Net loss		-		-		-		-		-			-		(6,342,520	)		(6,342,520	)
Balances - August 31, 2013		47,366,656	$	47,367		490,371,533	$	-	$	28,050,044		$	29,250	$	(29,846,344	)	$	(1,719,683	)
Shares issued for convertible debt		309,295,910		309,296		-		-		(39,944	)		-		-			269,352
Net loss		-		-		-		-		-			-		(636,404	)		(636,404	)
Balances - November 30, 2013 (unaudited)		356,662,566	$	356,663		490,371,533	$	-	$	28,010,100		$	29,250	$	(30,482,748	)	$	(2,086,735	)

The accompanying notes are an integral part of these financial statements

6

Colorado Goldfields Inc.  (An Exploration Stage Company)

Notes to the Unaudited Financial Statements

November 30, 2013

1.           Organization, Nature of Business, Going Concern and Management’s Plans

Organization and Nature of Business

Colorado Goldfields Inc. (the “Company”) was incorporated in the State of Nevada on February 11, 2004, under the name of Garpa Resources, Inc. On June 18, 2007, the Company changed its name to Colorado Goldfields Inc. (the “Company”). The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting for Development Stage Enterprises.” The Company’s principal business is the reactivation of a mill facility, and acquisition and exploration of mineral resources.  The Company has not presently determined whether the properties it has acquired and intends to acquire contain mineral reserves that are economically recoverable.

Going Concern and Management’s Plans

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  Since its inception in February 2004, the Company has not generated revenue and has incurred net losses.  The Company has a working capital deficit of $3,701,353 at November 30, 2013, has incurred net losses of $636,404 and $1,502,687 for the three months ended November 30, 2013 and 2012, respectively, and has an accumulated deficit during the exploration stage of $30,482,748 for the period from February 11, 2004 (inception) through November 30, 2013.  Accordingly, it has not generated cash flows from operations and has primarily relied upon equity financing, advances from officers, promissory notes, and advances from unrelated parties to fund its operations.

The Company is dependent upon the State of Colorado Division of Reclamation, Mining and Safety (“DRMS”) and State of Colorado Mined Land Reclamation Board (“MLRB”), approving an amendment to the existing reclamation permit for the Company’s Pride of the West Mill (“the Mill”).  The amendment would cure a current cease and desist order, which was issued in 2005, and allow the Mill to become operational.

In December 2010, the Company presented a proposed permit amendment (“AM-02”) to the MLRB.  While portions of that permit amendment were approved, there remained deficiencies that required additional work.

The Company prepared additional material for consideration by the DRMS and the MLRB.  Management submitted a new permit amendment application (“AM-03”), to the DRMS on January 27, 2012 and April 23, 2012.  On August 9, 2012, the DRMS approved, with conditions, AM-03.

The core of the permit consists of nine Environmental Protection Facilities (“EPFs”), which are: 1) Mill Building, 2) Ore Stockpile Area, 3) Laboratory Facility, 4) Leach Plant Building, 5) Flood Protection Dike, 6) Plant Waste Water Disposal, 7) Groundwater Intercept Drain, 8) Upland Stormwater Intercept Ditch, and 9) Mill Tailings Repository.  The DRMS approved the first eight EPFs, and work has commenced in these areas.

The conditions specified by the DRMS regard the ninth EPF, which is the Mill Tailings Repository.  The DRMS requested 1) additional geotechnical substrate stability analysis, 2) structure specific engineering designs for the cover of the repository, 3) analysis of the repository’s reserve capacity, 4) recalculation of financial warranty.  The Company estimates that the conditions will be satisfied by June 2014. Satisfaction of the remaining permit conditions is dependent upon the Company receiving sufficient project-level funding.

The Company currently faces a severe working capital shortage and is not presently generating any revenues.  The Company will need to obtain additional capital to fund its operations, continue mining exploration activities, fulfill its obligations under its mineral property lease/option agreements, and satisfy existing creditors.  In addition, the Company’s ability to continue as a going concern is subject to the successful resolution of outstanding litigation (Note 10.)

7

These circumstances raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts or classification of liabilities that may result from the possible inability of the Company to continue as a going concern.  Management’s plans with regards to these conditions are described below.

The Company continues to explore sources of additional financing to satisfy its current operating requirements.

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into various convertible debt funding arrangements described below that provided a total of $954,304 in capital.

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into funding arrangements with an institutional investor (the “Delaware Partnership Investor”), under which the Delaware Partnership Investor has provided convertible debt financing to the Company of $412,000 ($15,000 during the three months ended November 30, 2013) (Note 7).

During the years ended August 31, 2013 and through November 30, 2013, the Company also entered into funding arrangements for a total of $220,820 (nil during the three months ended November 30, 2013), with a group of New York private investors in the form of convertible notes (Note 7).

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into funding arrangements with a New York Alternative Investment Firm, under which the investors have provided convertible debt financing to the Company of $246,484 (nil during the three months ended November 30, 2013) (Note 7).

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into funding arrangements with a San Diego private investor, under which the investor has provided convertible debt financing to the Company of $75,000 (nil during the three months ended November 30, 2013) (Note 7).

Considering the difficult U.S. and global economic conditions, along with the substantial stability problems in the capital and credit markets, there is a significant possibility that the Company will be unable to obtain financing to continue its operations.

There is no assurance that required funds during the next twelve months or thereafter will be generated from operations, or that those funds will be available from external sources, such as debt or equity financings or other potential sources.  The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business.  Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders.  All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing.

2.           Summary of Significant Account Policies

Basis of Presentation

The accompanying interim financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  The financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at November 30, 2013 and the results of operations and cash flows of the Company for the three months ended November 30, 2013 and 2012, respectively.  Operating results for the three months ended November 30, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2014.

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and footnotes thereto included in its Annual Report on Form 10-K for the year ended August 31, 2013, which may be retrieved from the SEC.

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 Basic and Diluted Net Loss per Share

Basic earnings (loss) per share (“EPS”) is computed by dividing net loss attributable to common stockholders (numerator) by the weighted average number of shares of the Class A Common Stock outstanding (denominator) during the period.  During the year ended August 31, 2011, the Company issued shares of Class B Common Stock, which are not publicly-traded.  The Class B Common Stock share dividends equally with Class A Common Stock, and are defined as participating securities under US GAAP; however, they have no contractual obligation to share in losses of the Company.  The Company has therefore not included the Class B Common Stock in determining basic EPS.  Diluted EPS gives effect to all potential dilutive common shares outstanding during the periods using the treasury stock method (for options and warrants) and the two-class method (for Class B common stock).  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.  For the three months ended November 30, 2013 and 2012, the effect of the conversion of outstanding debt and Class B common shares would have been anti-dilutive.

The following table represents the potential dilutive securities excluded from the calculation of diluted loss per share.

	November 30, 2013		November 30, 2012
Class B Common Stock		490,371,533		490,371,533
Convertible debt		14,265,953,226		14,570

Effective September 12, 2012, the Financial Regulatory Authority, Inc. (“FINRA”), approved a 1 for 5,000 reverse stock split.  All references to Class A common stock in these financial statements have been adjusted to reflect the post-reverse split amounts.

Effective May 13, 2013 the FINRA approved a further 1 for 500 reverse stock split.  All references to Class A common stock in these financial statements have been adjusted to reflect the post-reverse split amounts.

Mining Rights and Claims

The Company has determined that its mining rights and claims meet the definition of mineral rights, as defined by accounting standards, and are tangible assets.  As a result, the costs of mining rights are initially capitalized as tangible assets when purchased.  If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserves.  The Company’s rights to extract minerals are contractually limited by time.  However, the Company has the ability to extend the leases (Note 4).  For mining rights in which proven and probable reserves have not yet been established, the Company assesses the carrying value for impairment at the end of each reporting period.  The Company recorded impairment charges of approximately $2,604 and $21,910 during the three months ended November 30, 2013 and 2012, respectively.

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 in the principal or most advantageous market.  The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

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Level 3 – assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions.  Unobservable inputs require significant management judgment or estimation.  In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.

As of November 30, 2013, the Company had the following financial assets and liabilities that are measured at fair value:

	Level 1		Level 2		Level 3
Restricted cash		-	$	515,428		-
Derivative liabilities		-	$	1,188,336		-

The fair values of financial instruments, which include cash, accounts payable, short-term notes payable, and convertible debt, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.  The fair value of amounts due to related parties are not practicable to estimate, due to the related party nature of the underlying transactions.

Asset Retirement Obligation

The fair value of a liability for an asset retirement obligation is required to be recognized in the period that it is incurred if a reasonable estimate of fair value can be made.  In connection with the Company’s acquisition of the Mill in June 2007, an asset retirement obligation of $500,000 was estimated and recorded.  The associated asset retirement costs were capitalized as part of the carrying amount of the Mill (See Note 3).  Accretion expense is recorded in each subsequent period to recognize the estimated changes in the liability resulting from the passage of time.  The Company recorded no accretion expense for either the three months ended November 30, 2013 or 2012, respectively.  Changes resulting from revisions to the original fair value of the liability are recognized as an increase or decrease in the carrying amount of the liability and the related asset retirement costs capitalized as part of the carrying amount of the long-lived asset.

During fiscal year 2012, the Company re-evaluated the original fair value of the asset retirement obligation as it relates to the Mill.  Unique to this asset, the reclamation permit for the Mill requires that the cost of retirement (reclamation), be calculated by the DRMS on a continuing basis, and a financial warranty be provided to guarantee that obligation.

As of November 30, 2013, the State of Colorado Division of Reclamation, Mining, and Safety has determined that $515,130 would be required to close and reclaim the asset and the Company has placed those funds as cash held as a restricted cash deposit with the State of Colorado. As of the date of this report, the Company is unaware of any condition that would cause an increase in that amount.

Recent Accounting Pronouncements

Management has evaluated recently issued accounting pronouncements to determine their applicability and does not believe that any of these pronouncements will have a significant impact on the Company's financial statements.

3.           Property, Plant and Equipment

On June 29, 2007, the Company acquired the Mill located in Howardsville, Colorado. The cost of the Mill was $1,400,677.  In connection with the acquisition, the Company entered into a $650,000 mortgage with the seller, which is collateralized by the mill property and bears interest at 12% per year.  All unpaid principal was originally due June 29, 2009.  The due date on the mortgage was extended and was due in full on December 1, 2013, and is currently in default.  During the three months ended November 30, 2013, $15,000 of the mortgage was paid through the issuance of convertible notes (Note 7).

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Interest expense in connection with the Mill mortgage for the three months ended November 30, 2013 and 2012 was $5,739 and $13,295, respectively.

In connection with the acquisition of the Mill, the Company replaced a financial warranty that the seller had provided to the DRMS in the amount $318,654.  During the 2011 fiscal year, the DRMS required and the Company provided an additional $196,476 of financial warranty.  As of November 30, 2013, the total funds, which are held as a restricted cash deposit with the State of Colorado, related to the Mill financial warranty is $515,130.

Property, plant and equipment consist of the following as of November 30, 2013 and August 31, 2013:

	November 30, 2013			August 31, 2013
Computer equipment	$	5,179		$	5,179
Mobile mining equipment		5,000			5,000
Land and mill		1,434,846			1,434,846
		1,445,025			1,445,025
Less accumulated depreciation		(9,074	)		(8,819	)
	$	1,435,951		$	1,436,206

Depreciation expense was $255 and $1,153 for the three months ended November 30, 2013 and 2012, respectively.  Property, plant and equipment are depreciated on a straight line basis over their estimated useful lives ranging from three to five years.  However, a significant portion of the Company’s property, plant and equipment has not yet been placed in service and accordingly is not being depreciated.

4.           Mining Rights and Claims

King Solomon Mine

On September 18, 2009, the Company entered into a lease with an option to purchase the King Solomon Mine, in consideration for which the Company issued 10,000 pre-split (20 post-split) shares of restricted Class A Common Stock valued at $17.50 pre-split ($8,750 post-split) per share (the quoted market price on the date the Company entered into the agreement and obtained the mining rights) totaling $175,000.  The lease/option was for a period of three years.  The stock was restricted from sale during the initial term of the lease.  The lease/option automatically renewed and continued so long as ores, minerals, or metals are produced or sold.  The lease granted the Company the exclusive right to perform exploration, mining, development, production, processing or any other activity that benefits the leased premises and required a minimum work commitment of $50,000 to be expended by the Company for each successive three year term during the term of the lease/option.  The lease also required the Company to pay the lessor a 3.5% NSR on all mineral bearing ores.  In addition, before royalties are computed, 5% of the value of NSR on all materials produced and sold from the mining property must be deducted for the purpose of a contingency reclamation reserve fund for paying potential reclamation costs, up to $200,000.  The Company has the sole and exclusive option to purchase all of lessor's right, title and interest in the property for a total purchase price of $1,250,000, payable in cash or other cash equivalents as mutually agreed by the lessor and the Company.

On October 11, 2012, the Company entered into a three-year extension and renewal of mining lease with option to purchase, effective September 18, 2012, for which the Company issued 250,000 pre-split (500 post-split) shares of restricted Class A Common Stock, with an additional 25,000 pre-split (50 post-split) shares to be issued upon each yearly anniversary.  The mining lease with an option to purchase expires on September 18, 2015.  The Company recorded $62,500 as mining rights and claims based upon the share price on the date of the transaction of $0.25 pre-split ($125 post-split) per share.  The stock is restricted for two years.  The original work commitment outlined above is considered fulfilled.  All other terms and conditions of the original lease remain in effect.

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Pay Day and Rage Uranium Claim Group

On June 13, 2011, the Company purchased mineral rights to 63 mining claims in the state of Utah.  The claims are referred to as The Pay Day and Rage Uranium Claim Group and are located in San Juan County northeast of Monticello, Utah.  In consideration for the acquisition of these claims, the Company issued 50,000 pre-split (100 post-split) shares of restricted Class A Common Stock, which had a value of $150,000 on the purchase date, (based on the quoted market price on the date the Company entered into the agreement and obtained the mineral rights).  The shares were issued in two blocks of 25,000 pre-split (50 post-split) shares each and were subject to lock-up provisions for periods of one and two years respectively, during which no sales or other conveyances of the shares could be undertaken.

5.           Notes payable – related parties

As of November 30, 2013, the Company has notes payable to related parties, including accrued interest, of $96,993 and $264,838 with its chief executive officer (“CEO”) and its chief financial officer (“CFO”), respectively.  In connection with the borrowings, the Company executed unsecured promissory notes (“Notes”) which are due six months from the dates of issue and accrue interest at 6.5% per annum (or 18% per annum, if the Notes are in default).  The funds received in exchange for the Notes have primarily been used by the Company to finance working capital requirements.

On April 8, 2011, the Company secured the amounts owed to the CEO and CFO, with the Mill, and filed Second Deeds of Trust in San Juan County, Colorado.  In connection with the Deeds of Trust, all of the individual Notes were combined into two promissory Notes, and are due in their entirety on December 31, 2013.  These notes are currently in default.  During the three months ended November 30, 2013 and 2012 the Company recorded interest expense of $4,573 for both periods, respectively.

6.           Promissory notes payable

On September 12, 2011, the Company entered into a settlement agreement and mutual general release with an individual that had originally filed a breach of contract complaint against the Company in November 2009 (the “Plaintiff”) and the Company agreed to pay the Plaintiff $80,000 with interest of 8.00% per annum due in full on September 12, 2013.  The Company has recorded interest expense of $3,288 and $1,596 for the three months ended November 30, 2013 and 2012, respectively.  The Company did not pay the note when it was due and interest is now being accrued at the default rate of 18%.

On December 22, 2011, the Company entered into a promissory note with one of its vendors in exchange for $24,000.  The promissory note bears interest at 6.5% per annum and was due on June 22, 2012.  In June 2012, the note was extended, and was extended again on December 30, 2012 and is now due on December 31, 2013.  All other terms remained the same.  In exchange for extension of the due date, the note is now secured by a Deed of Trust on the Company’s Pride of the West Mill.  If the Company fails to pay off the note on its due date, the entire principal and accrued interest will bear interest at 18% per annum.  The note is currently in default.  The Company recorded interest expense of $394 and $389 for the three months ended November 30, 2013 and 2012, respectively.

7.           Convertible notes

Delaware Partnership Investor

At September 1, 2013, the Company owed the Delaware Partnership Investor $113,195 (net of unamortized discounts of $183,712), under multiple funding arrangements.  During the three months ended November 30, 2013, the Company issued 1 convertible note under a funding arrangement with the Delaware Partnership Investor, totaling $15,000 which bears interest at 10% per annum and matures on September 30, 2014.  Proceeds from the note were used to reduce the mill mortgage.  The note is convertible at any time, at the option of the holder, into shares of Class A common stock of the Company at conversion rates of 40% of the average of the two lowest, or single, volume-weighted average closing prices of the Company’s Class A common stock for the ten trading days immediately prior to the date a conversion notice is received by the Company.  The Company recorded a discount in the amount of $15,000 related to the conversion features on the note issued during the three months ended November 30, 2013 (Note 8).  During the three months ended November 30, 2013, $29,976 of the convertible notes were converted into common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  During the three months ended November 30, 2013, the Company recorded $69,527 of debt discount amortization and the carrying value of the notes was $168,479 (net of unamortized discounts of $114,121) as of November 30, 2013.  On June 18, 2013, the Company secured $278,802 of the amounts owed to the Delaware Partnership Investor, with the Mill, which was filed in San Juan County on September 12, 2013.

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New York Private Investors

At September 1, 2013, the Company owed the New York Private Investors $92,517 (net of unamortized discount of $94,103), under multiple funding arrangements.  The notes are under funding arrangements with the group of New York Private Investors, bearing interest at 8% per annum and with maturities between October 25, 2013 and May 29, 2014.  The notes are convertible at any time after 180 days from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at conversion rates of 35%, 45% and 51% of the average of the three lowest volume-weighted average closing prices of the Company’s Class A common stock for the ten or thirty trading days immediately prior to the date a conversion notice is received by the Company.  During the three months ended November 30, 2013, $18,800 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  For the three months ended November 30, 2013, the Company recorded debt discount amortization of $48,643 and the carrying value of the notes as of November 30, 2013 was $122,359 (net of unamortized discounts of $45,461).

New York Alternative Investment Firm

At September 1, 2013, the Company owed the New York Alternative Investment Firm $63,117 (net of unamortized discount of $49,813), under multiple funding arrangements, bearing interest at 12% per annum, with maturities between December 13, 2013 and April 8, 2014.   Proceeds from two of the notes were used to reduce the mill mortgage by $175,984, and are convertible into shares of Class A common stock.  The remaining two notes mature on February 8, 2014.  The four notes are convertible at any time from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at a conversion rate of 45% of the lowest volume-weighted average closing prices of the Company’s Class A common stock for the five trading days immediately prior to the date a conversion notice is received by the Company.  During the three months ended November 30, 2013, $24,585 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  For the three months ended November 30, 2013, the Company recorded debt discount amortization of $24,555 and the carrying value of the notes as of November 30, 2013 was $71,401 (net of unamortized discounts of $65,498).

San Diego Private Investor

At September 1, 2013, the Company owed the San Diego Private Investor $16,027 (net of unamortized discount of $58,973).  The notes are interest free for the first three months, then a one-time interest charge of 12% is applied to the principal balance.  The notes mature on April 10, 2014, June 4, 2014 and August 28, 2014 and are convertible at any time from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at a conversion rate of the lesser of $1.25 post-split or 60% of the lowest closing price of the Company’s Class A common stock for 25 trading days immediately prior to the date a conversion notice is received by the Company.  During the three months ended November 30, 2013, $6,925 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  For the three months ended November 30, 2013, the Company recorded debt discount amortization of $18,009 and the carrying value of the notes as of November 30, 2013 was $30,286 (net of unamortized discounts of $37,789).

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8.           Derivative Liabilities

In accordance with ASC 815-15, Embedded Derivatives, the Company determined that the conversion features of the convertible notes described in Note 7 meet the criteria of an embedded derivative, and therefore the conversion features of the debt have been bifurcated and accounted for as derivatives.  The debt does not meet the definition of “conventional convertible debt” because the number of shares which may be issued upon the conversion of the debt is not fixed.  Therefore, the conversion features, pursuant to ASC 815-40, Contracts in Entity’s Own Equity, have been accounted for as derivative liabilities.  The Company adjusts the fair value of these derivative liabilities to fair value at each reporting date.

The Company uses a valuation pricing model to calculate the fair value of its derivative liabilities.  Key assumptions used to apply this model were as follows:

	Three months ended			Year ended
	November 30, 2013			August 31, 2013
Expected term	0 to 12 months			0 to 12 months
Volatility		494%-631	%		232% - 922	%
Risk-free interest rate		0.02 - 0.16	%		0.02 - 0.19	%
Dividend yield		0	%		0	%

The following table represents the Company’s derivative liability activity for the embedded conversion features for the three months ended November 30, 2013:

Balance at September 1, 2013	$	1,424,115
Issuance of derivative liabilities		34,500
Derecognition of derivative liabilities related to conversion of convertible debt		(186,946	)
Gain on derivative liabilities		(83,333	)
Balance at November 30, 2013	$	1,188,336

9.           Stockholders’ Deficit

Class A Common Stock

During the three months ended November 30, 2013, the Company converted debt and derecognized derivative liabilities totaling $269,352 into 309,295,910 shares of restricted Class A Common Stock.

On April 18, 2013 the Company filed amendments to its two stock compensation plans.  The amendments provided for an additional 50,000,000 pre-split (100,000 post-split), Class A common stock shares to be available for issuance under each of the 2008 Non-qualified Consultants and Advisors Stock Compensation Plan and the 2008 Stock Compensation Plan.  On August 5, 2013, the Company filed additional amendments which provided for an additional 20,000,000 post-split shares to be issued under each plan.  As of November 30, 2013, the Company is authorized to grant up to 20,146,644 shares under the 2008 Stock Compensation Plan (formerly the 2008 Employee Stock Compensation Plan), and 20,140,746 shares under the 2008 Non-qualified Consultants and Advisors Stock Compensation Plan of which 7,038,378 have been issued as of November 30, 2013.

10.           Litigation

San Juan Properties and Hennis Proceedings

On April 6, 2009, Todd C. Hennis (the former President and CEO of the Company), and entities San Juan Corp., and Salem Minerals Inc. (which are substantially owned by Mr. Hennis), served upon the Company a Complaint seeking among other things, a $100,000 payment pursuant to the option agreement, and release from his shareholder lock-up agreement and from Rule 144 trading restrictions on approximately 10,300 shares of Class A Common Stock held by Mr. Hennis.  On May 12, 2009, a counter-claim with jury demand was filed against Mr. Hennis and his entities for wrongful conversion, breach of duty of loyalty, lack of good faith, breach of fiduciary duty, and significant conflicts of interest.

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Hennis filed a Motion for Summary Judgment on October 16, 2009.  On September 2, 2010, the court granted partial summary judgment in favor of Mr. Hennis and awarded him damages of $230,707.  On September 22, 2010, the court awarded additional damages in the amount of $114,896 to Mr. Hennis for a total of $345,603, which has been recorded as an accrued liability by the Company as of August 31, 2013 and November 30, 2013.  On March 25, 2011, the court awarded an additional $58,989 to Hennis for attorney’s fees, which was accrued as of August 31, 2012.  However, in April 2012, the Court of Appeals remanded the award of attorney’s fees and therefore the accrual has been reduced by $58,989.

The Company filed motions for (a) a new trial on all or part of the issues; (b) an amendment of findings; and (c) an amendment of judgment pursuant to C.R.C.P. Rule 58(a).  On March 25, 2011, the court evoked C.R.C.P. 59(j) and denied the post-trial motions by not ruling on them.

The Company filed a Notice of Appeal with the Colorado Court of Appeals on January 7, 2011.  On April 5, 2012, the Colorado Court of Appeals affirmed the judgment ($345,603), however the order awarding plaintiffs their trial attorney fees ($58,989) and costs was vacated, and the case was remanded to the district court for further proceedings.  The Company filed a Petition for Rehearing in the Court of Appeals on April 9, 2012, which was denied on May 17, 2012.  On December 6, 2013, the Court ordered a hearing be held to address the attorney fee issue.

On August 31, 2012, The Company filed a Petition of Certiorari with the Colorado Supreme Court.  On May 23, 2013, the Supreme Court denied the Company’s Petition of Certiorari.  The judgment ($345,603) is affirmed, the order awarding plaintiffs their trial attorney fees ($58,989) and costs is vacated, and the case is remanded for further proceedings.

On June 5, 2013, Hennis filed a motion to release funds of approximately $85,300, from the San Juan County court registry.  These funds were placed into the court registry as a result of a garnishment order on April 18, 2011.

Post Judgment Collection Actions by Hennis

On August 23, 2013, Hennis attempted to have a receiver appointed to take control over the Company by means of an Ex Parte Motion for the Appointment of a Receiver filed in Jefferson County, Colorado.  This motion was denied by the court on September 4, 2013.  The court’s order stated, “Should plaintiffs wish to pursue their Rule 66 motion, they should serve their complaint and motion upon defendant and, after service is effected, contact the court to request a forthwith hearing.”

On September 6, 2013, the Company was served, through its registered agent, with 1) Renewed Motion for Appointment of Receiver, and 2) Verified Complaint, seeking a judicial foreclosure, declaratory judgment, breach of fiduciary duties.

A hearing on the motion to appoint a receiver was held on November 12 and 15, 2013.  The motion to appoint a receiver was denied on November 19, 2013.  The Company has filed its answer and initial disclosures regarding the underlying complaint regarding judicial foreclosure, declaratory judgment, breach of fiduciary duties, and awaits the court’s scheduling of a case management conference.

On December 20, 2013, Hennis filed a Motion with the Court seeking Judgment on the Pleadings, Alternatively for Summary Judgment, as to Plaintiffs’ First Claim for Relief, that claim being a judicial foreclosure of Defendant’s assets.

On January 6, 2014, Hennis filed a Notice of Appeal with the Colorado Court of Appeals appealing the Court’s November 19, 2013, denial of Hennis’ Renewed Motion for Appointment of Receiver.

Recreation Properties, Thomas A. Warlick

On December 5, 2013, Recreation Properties, Thomas A. Warlick, President, served upon the Company, C. Stephen Guyer (“Guyer”), and Lee R. Rice (“Rice”) a Complaint alleging; 1) Default Upon a Promissory Note Payable, 2) Breach of Contract, Breach of Fiduciary Duty (Guyer and Rice), and 3) Fraudulent Transfer Under CRS §§ 38-8-105(1)(b) & 106(1).  The Complaint seeks a judgment in favor of Recreation Properties, recovery of funds transferred to Guyer and Rice during the last four years preceding the complaint, and avoidance of the Deeds of Trust granted to Guyer and Rice.

The Company filed its answer on December 26, 2013.  On the same date, the Company filed a Motion to Consolidate this case with the Hennis action described above. On January 24, 2014, the court granted the Company's Motion to Consolidate.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion provides information that management believes is relevant to an assessment and understanding of the financial condition and results of operations of Colorado Goldfields Inc. (the “Company”).

This discussion addresses matters we consider important for an understanding of our financial condition and results of operations as of and for the years ended August 31, 2013 and 2012, as well as our future results. It consists of the following subsections:

●   “Results and Plan of Operation” which provides a brief summary of our consolidated results and financial position and the primary factors affecting those results, as well as a summary of our expectations for fiscal 2014;

●   “Liquidity and Capital Resources,” which contains a discussion of our cash flows and liquidity, investing activities and financing activities, contractual obligations, and critical obligations;

●   “Results of Operations and Comparison”,”  which sets forth an analysis of the operating results for the three months ended November 30, 2013 and 2012;

●   “Critical Accounting Policies,” which provides an analysis of the accounting policies we consider critical because of their effect on the reported amounts of assets, liabilities, income and/or expenses in our consolidated financial statements and/or because they require difficult, subjective or complex judgments by our management;

●   “Recent Accounting Pronouncements and Developments,” which summarizes recently published authoritative accounting guidance, how it might apply to us and how it might affect our future results.

This item should be read in conjunction with our financial statements and the notes thereto included in this annual report.

Results and Plan of Operation

On September 6, 2013, the Company was served, through its registered agent, with 1) Renewed Motion for Appointment of Receiver, and 2) Verified Complaint, seeking a judicial foreclosure, declaratory judgment, breach of fiduciary duties by Todd C. Hennis and related entities as Plaintiff.

A hearing on the Motion to Appoint a Receiver was held on November 12 and 15, 2013.  The motion to appoint a receiver was denied on November 19, 2013.  See “Legal Proceedings” for additional details regarding this litigation.

On December 5, 2013, Recreation Properties, Thomas A. Warlick, President, served upon the Company, C. Stephen Guyer, and Lee R. Rice a Complaint alleging; 1) Default Upon a Promissory Note Payable, 2) Breach of Contract, Breach of Fiduciary Duty (Guyer and Rice), and 3) Fraudulent Transfer Under CRS §§ 38-8-105(1)(b) & 106(1).  The Complaint seeks a judgment in favor of Recreation Properties, recovery of funds transferred to Guyer and Rice during the last four years preceding the complaint, and avoidance of the Deeds of Trust granted to Guyer and Rice.  See “Legal Proceedings” for additional details regarding this litigation.

Our entire plan of operation is of course subject to the successful resolution of the legal actions brought by Todd C. Hennis and Thomas A. Warlick.

Plan of Operation

Our plan of operation for fiscal 2014 is to: 1) acquire funding for our operations and mining exploration program, 2) complete all necessary permitting requirements, 3) bring the Mill into operation, and 4) commence milling of ore,

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The following discussion updates our plan of operation for the foreseeable future.  The discussion also summarizes the results of our operations for the three months ended November 30, 2013 and compares those results to the three months ended November 30, 2012.

During the first quarter of fiscal 2014, we continued to experience the negative effects of the financial markets upheaval, which made capital acquisition extremely difficult.  Furthermore, enormous time was consumed in defense of the litigation brought by Todd Hennis and his entities and Thomas A. Warlick and his entity Recreation Properties, Inc.  Operations of the Company have been entirely disrupted by this litigation.

Operations at the Pride of the West Mill:

During the quarter ended November 30, 2013, we continued the very specific analysis to satisfy conditions that were imposed on full permit approval by the DRMS.  The core of the permit consists of nine Environmental Protection Faculties (“EPFs”), which are: 1) Mill Building, 2) Ore Stockpile Area, 3) Laboratory Facility, 4) Leach Plant Building, 5) Flood Protection Dike, 6) Plant Waste Water Disposal, 7) Groundwater intercept Drain, 8) Upland Stormwater Intercept Ditch, 9) Mill Tailings Repository.

The conditions specified by the DRMS regard the ninth EPF, the Mill Tailings Repository and simply request additional geotechnical substrate stability analysis, structure specific engineering designs for the cover of the repository, the repository’s reserve capacity, and the always on-going recalculation of financial warranty.  Management believes that these conditions will be satisfied by the end of June 2014.  However, operations within the approved areas have been rapidly initiated.

Operations at the Champion Mine:

In February 2013, we completed a Preliminary Technical Report for the Champion Mine Project located in San Juan County, Colorado.  The report was prepared in accordance with Canadian National Instrument 43-101 and SEC Guideline 7 criteria.  The NI 43-101 instrument is a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges within Canada.  The purpose of the National Instrument 43-101 is to ensure that misleading, erroneous or fraudulent information relating to mineral properties is not published and promoted to investors on the stock exchanges overseen by the Canadian Securities Authority.  Additionally, the NI 43-101 instrument is used by many companies that report only on United States stock exchanges.

The report was prepared by Mr. Lee R. Rice, who is President and CEO of Colorado Goldfields Inc. and is a Qualified Person (QP) as defined by Canadian National Instrument 43-101.  Mr. Rice is a Registered Professional Engineer in the state of Colorado and is a member in good standing of the Society for Mining, Metallurgy, and Exploration, Inc. as well as being a member in good standing of a number of other professional technical societies.

The Champion Mine consists of approximately 591 acres located in the San Juan Mountains at Silverton, Colorado.  The mine is located within the rim of the Silverton Caldera complex at the southwestern extremity of the Colorado Mineral Belt.

The property has been intermittently developed and mined by numerous separate operators between 1876 and 1942, during which period an estimated 375,000 ounces of gold and 15,000,000 ounces of silver have been produced from a northwesterly trending and steeply south dipping vein system.  Production was halted in 1942 as a result of the US Government's Gold Mine Closing Order, brought on by World War II.

The stock issued for both the Silver Wing and Champion Mines is non-refundable and represents one component of a contemplated comprehensive funding transaction.

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Operations at the Silver Wing Mine:

In January 2013, we completed a Preliminary Technical Report for the Silver Wing Project located in San Juan County, Colorado.  The report was prepared in accordance with Canadian National Instrument 43-101 and SEC Guideline 7 criteria.

The report was prepared by Mr. Lee R. Rice, who is President and CEO of Colorado Goldfields Inc. and is a Qualified Person (QP) as defined by Canadian National Instrument 43-101.  The NI 43-101 instrument is a codified set of rules and guidelines for reporting and displaying information related to mineral properties owned by, or explored by, companies which report these results on stock exchanges within Canada.  The purpose of the National Instrument 43-101 is to ensure that misleading, erroneous or fraudulent information relating to mineral properties is not published and promoted to investors on the stock exchanges overseen by the Canadian Securities Authority.  Additionally, the NI 43-101 instrument is used by many companies that report only on United States stock exchanges.

Mr. Rice is a Registered Professional Engineer in the state of Colorado and is a registered member in good standing of the Society for Mining, Metallurgy, and Exploration, Inc. as well as being a member in good standing of a number of other professional technical societies.

On October 31, 2013, the contracts for purchase of the Champion and Silver Wing Mines expired unconsummated.  We currently anticipate that these contracts may be subject to renegotiation.  Therefore, until this occurs, the Company does not own the Champion Mine or Silver Wing Mine.

Operations at the Brooklyn Mine:

The Lease with an Option to Purchase for the Brooklyn was terminated on September 6, 2012.  After extensive analysis of potential acid mine drainage problems, we decided not to seek to renew the lease.  Pursuant to the lease, work commitment expenses not spent on the properties were due to the lessors in cash or cash equivalents, including additional shares of Company stock.  Failing to negotiate the anticipated lease renewal, on November 1, 2012 the Company issued 6,397,300 pre-split (12,795 post-split) shares of restricted Class A Common Stock, valued at $660,834 on the date of issue to satisfy all terms of the lease.

Operations at the King Solomon Mine:

We completed our 2011 exploration program on the King Solomon Mine during the first quarter of fiscal 2012.   On October 11, 2012, we entered into a three-year Extension and Renewal of Mining Lease with Option to Purchase the King Solomon Mine under substantially the same terms as the original lease.  Plans to develop the King Solomon property are moving forward.

Operations at the Pay Day and Rage Uranium Claim Group

On June 13, 2011, we purchased the Pay Day and Rage Uranium Claim Group.  These claim groups consist of 63 (55 Pay Day and 8 Rage) claims.  The Pay Day claim group is located in Township 32 South, Range 24 East of the Salt Lake Meridian in Sections 26, 27, 34, and 35, in San Juan County northeast of Monticello, Utah.  The Rage claim group spans Stevens Canyon on the southeast flank of the Seven Sisters Buttes in Township 33 South, Range 20 East of the Salt Lake Meridian in Section 33, San Juan County, Utah.

An initial internal analysis by Company president Lee R. Rice indicates that the historical information used by others did not account for all possible sources and additional potential resource at depth.

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General Operations

Weather conditions in San Juan County, Colorado vary by season.  During the winter season, our activities are concentrated on analysis, planning, and development of properties in more temperate climates.  Surface drilling and property exploration in San Juan County can reasonably take place between May and late October.  Of course, underground operations continue year-round.

Liquidity and Capital Resources

Since we have received no revenue from the production of gold or other metals, we have relied on funds received in connection with our equity and debt offerings to finance our ongoing operations.  We have experienced net losses since inception, and we expect we will continue to incur losses for the next several years.  As of the date of this filing, we do not have any available external source of funds.  We require additional capital in the near term to maintain our current operations.  Although we are actively seeking additional equity and debt financing, such financing may not be available on acceptable terms, if at all.

Since its inception in February 2004, we have not generated revenue and have incurred net losses.  We have a working capital deficit of $3,701,353 at November 30, 2013, have incurred net losses of $636,404 and $1,502,687 for the three months ended November 30, 2013 and 2012, respectively, and have an accumulated deficit during the exploration stage of $30,482,748 for the period from February 11, 2004 (inception) through November 30, 2013.  Accordingly, we have not generated cash flows from operations and have primarily relied upon equity financing, advances from officers, promissory notes, and advances from unrelated parties to fund our operations.

We currently have minimal cash on hand.  Accordingly, we do not have sufficient cash resources or current assets to pay our obligations, and we have been meeting many of our obligations through the issuance of our common stock to our employees, consultants and advisors as payment for goods and services.  Considering the foregoing, we are dependent on additional financing to continue our operations and exploration efforts and, if warranted, to develop and commence mining operations.  Our significant capital requirements for the foreseeable future are: payment of $191,317 on a mortgage note and accrued interest, which is collateralized by the Mill (due December 1, 2013 and currently in default), payment on notes payable to related parties including accrued interest totaling $361,831, payment of amounts related to the Hennis and Warlick litigation of $521,000, re-activation expenses for the Mill (approximately $3 million), and our corporate overhead expenses.

We are actively seeking additional equity or debt financing, and have secured four sources of funding.  However, there can be no assurance that the total funds required during the next twelve months or thereafter will be available from external sources.  The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force us to substantially curtail or cease operations and would, therefore, have a material adverse effect on our business.  Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on our existing shareholders.  All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing.

We are dependent upon the DRMS and State of Colorado Mined Land Reclamation Board (“MLRB”), fully approving an amendment to the existing reclamation permit for the Mill.  Full approval of the amendment would cure the current cease and desist order, which was issued in 2005, and allow the Mill to become operational.  The permit amendment process is lengthy and complex.  We submitted an amendment to our existing reclamation permit on January 27, 2012 and April 23, 2012 (AM-03), and the DRMS approved the amendment with conditions on August 9, 2012.  We are now preparing material that will satisfy the remaining conditions of the approval.

Ultimately, should the Company not be able to satisfy the conditions of approval and bring the Mill into operation, management anticipates that the Mill will be reclaimed and liquidated.

We have effected two reverse stock splits of our Class A Common Stock.  As discussed further below, the first, a 1 for 5,000 reverse split effective September 12, 2012 and secondly, a 1 for 500 reverse split effective May 13, 2013. These actions were taken to better align the stock price with our accomplishments and operational objectives.  We believe these transactions will broaden our shareholder base, increase the appeal of the stock to investors, and help facilitate electronic transactions of our stock through Depository Trust & Clearing Corporation.  We strongly believe that this split will provide benefits to our shareholders by improving trading accessibility and liquidity, thereby enhancing long-term shareholder value.

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Effective September 12, 2012, every 5,000 shares of Class A common stock of CGFIA were automatically combined into one share of Class A common stock.  The reverse split reduced the number of shares of outstanding Class A common stock from approximately 28.2 billion pre-split to approximately 5.7 million post-split at August 31, 2012.  The number of authorized shares of Class A common stock was reduced from 35 billion to 7 million.  Proportional adjustments were made to our convertible notes and equity compensation plans.  All fractional shares were rounded up to the nearest whole number.  The reverse split did not negatively affect any of the rights that accrue to holders of Class A common stock or common stock equivalents.  The reverse split was not a taxable event to existing stockholders

On October 10, 2012 pursuant to Nevada Revised Statutes (“NRS”) 78.320 we received written consents in lieu of a Meeting of Stockholders from the Officer and Director Stockholders holding 92% of the total possible votes outstanding, to establish and fix the total number of authorized shares of Class A Common Stock, par value $0.001 per share, that the Company is authorized to issue, at one billion.

Effective May 13, 2013 every 500 shares of Class A Common Stock were automatically combined into one share of Class A common stock.  As a result of this corporate action, the total number of issued and outstanding shares of Class A Stock decreased from 328,111,671 shares to 656,223 (the foregoing number divided by 500), and our authorized shares of Class A common stock were decreased concurrently from 1,000,000,000 to 2,000,000 shares.  Proportional adjustments were made to our convertible notes and equity compensation plans.  All fractional shares were rounded up to the nearest whole number.  This reverse split did not negatively affect any of the rights that accrue to holders of CGFIA common stock or common stock equivalents.  The reverse split was not a taxable event to existing stockholders.

All references to Class A common stock in this document have been adjusted to reflect the post-split amounts.

On May 13, 2013, pursuant to Nevada Revised Statutes (“NRS”) 78.320 we received written consents in lieu of a Meeting of Stockholders from the Officer and Director Stockholders holding 92% of the total possible votes outstanding, to establish and fix the total number of authorized shares of Class A Common Stock, par value $0.001 per share, that the Company is authorized to issue, at one billion.

The increase to the authorized capital was made, in part, to provide us with more flexibility and opportunities to conduct equity financings, acquisitions, satisfy the reserved but unissued requirements of convertible debt financings, option agreements, and warrant reserves in connection potential with financings.  Having such additional authorized shares of capital stock available for issuance in the future should give us greater flexibility and may allow such shares to be issued without the expense and delay of a special shareholders’ meeting or obtaining written consents.  Although such issuance of additional shares with respect to future financings and acquisitions would dilute existing shareholders, management believes that such transactions would increase the total value of the Company to its shareholders.  The increase in authorized Class A Common Stock will not have any immediate effect on the rights of existing shareholders.

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Results of Operations

Three Months Ended November 30, 2013 compared to the Three Months Ended November 30, 2012

For the three months ended November 30, 2013, we incurred a net loss of approximately $636,000 compared to a net loss of approximately $1,503,000 for three months ended November 30, 2012; a 58% decrease of $867,000.

Mineral property and exploration costs were $78,000 and $782,000 for the three months ended November 30, 2013 and 2012, respectively.  The decrease of $704,000 was primarily due to settlement costs associated with the Brooklyn lease expenses fiscal year 2013, and the cessation of work due to the litigation brought by Todd C. Hennis and Thomas A. Warlick.

Professional fees increased $83,000 from $41,000 for the three months ended November 30, 2012 to $124,000 for the three months ended November 30, 2013.  The increase was due to legal fees associated with to the litigation brought by Todd C. Hennis and Thomas A. Warlick.

General and administrative costs were approximately $249,000 and $419,000 for the three months ended November 30, 2013 and 2012, respectively, a 41% decrease of $170,000.  The decrease was due primarily to the specific reasons presented below.

Consulting expenses were zero and $87,000 for the three months ended November 30, 2013 and 2012, respectively.  The decrease is due to the reduced use of outside services for corporate communications, economic imaging, and general advisement.

Salaries were $219,000 and $116,000 for the three months ended November 30, 2013 and 2012, respectively, a  increase of $103,000.  The increase was due to higher compensation pursuant to our executive compensation agreements.  Salaries are generally either accrued as an unpaid liability or, partially paid in the form of stock awards in lieu of cash, which are exempt under Rule 16b-3.  However, no stock compensation has been issued since August, 2013.  Amounts owed pursuant to all our executive employment agreements have been fully accrued as of November 30, 2013.  In August 2013, a large portion of executive compensation was converted to 1 year restricted stock.

Filing fees and transfer agent fees were $6,000 and $13,000 for the three months ended November 30, 2013 and August 31, 2012, respectively.  The $7,000 decrease was due to the absence of filing and transfer agent fees associated with corporate actions affecting shares in 2012.

Bank and brokerage fees decreased to $348 for the three months ended November 30, 2013 from $4,000 for the three months ended November 30, 2012.  The decrease was due to lower costs associated with transacting the Class A Common Stock shares of the Company.

Other income and (expense) was ($186,000) and ($260,000) for the three months ended November 30, 2013 and 2012, respectively.  The decrease of $74,000 is primarily related to the required accounting treatment of convertible debt derivative liabilities and the amortization of debt discounts.

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Critical Accounting Policies

We have identified the following critical accounting policies which were used in the preparation of our financial statements.

Exploration and Development Costs:  Costs of exploration and development costs are expensed as incurred unless proven and probable reserves exist and the property is a commercially minable property.  When it has been determined that a mineral property can be economically developed as a result of established proven and probable reserves, the costs to develop such property will be capitalized.  Costs of abandoned projects will be charged to operations upon abandonment.

Long-lived Assets:  We periodically evaluate the carrying value of property, plant and equipment costs, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded.  The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon a variety of factors expected to result from the use and the eventual disposal of the asset, as well as specific appraisals in certain circumstances.

Property Retirement Obligation: Asset retirement costs are capitalized as part of the carrying amount of certain long-lived assets.  Accretion expense is recorded in each subsequent period to recognize the changes in the liability resulting from the passage of time.  Changes resulting from revisions to the original fair value of the liability are recognized as an increase or decrease in the carrying amount of the liability and the related asset retirement costs capitalized as part of the carrying amount of the related long-lived asset.

Mining Rights:  The Company has determined that its mining rights meet the definition of mineral rights and are tangible assets.  As a result, the costs of mining rights are initially capitalized as tangible assets when purchased.  If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserves.  For mining rights in which proven and probable reserves have not yet been established, the Company assesses the carrying value for impairment at the end of each reporting period.  Mining rights are stated at cost less accumulated amortization and any impairment losses.  Mining rights for which probable reserves have been established will be amortized based on actual units of production over the estimated reserves of the mines.

Derivatives:  The Company follows the relevant accounting guidance and records derivative instruments (including certain derivative instruments embedded in other contracts) in the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative’s fair value recognized currently in earnings unless specific hedge accounting criteria are met. The Company values these derivative securities under the fair value method at the end of each reporting period (quarter), and their value is marked to market at the end of each reporting period with the gain or loss recognition recorded in earnings. The Company continues to revalue these instruments each quarter to reflect their current value in light of the current market price of our Common Stock. The Company utilizes a valuation pricing model to estimate fair value. Key assumptions of the valuation pricing model include applicable volatility rates, risk-free interest rates and the instrument’s expected remaining life. These assumptions require significant management judgment.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company”, we are not required to provide the information required by this Item. However, please see “Part II, Item 1A. Risk Factors” for a discussion of the risks associated with the Company.

Item 4.Controls and Procedures.

(a)  Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms, and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

Under the supervision of, and the participation of, our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of our disclosure controls and procedures as of November 30, 2013.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of November 30, 2013 as a result of the material weaknesses in internal control over financial reporting due to lack of segregation of duties and a limited corporate governance structure as discussed in Item 9A of the Company’s Form 10-K for the fiscal year ended August 31, 2013.

While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full time staff.  We believe that this is typical in most exploration stage companies.  We may not be able to fully remediate the material weakness until we commence mining operations at which time we would expect to hire more staff.  We will continue to monitor and assess the costs and benefits of additional staffing.

(b) Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the last fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1.Legal Proceedings.

The Company is involved in the following legal proceeding:

San Juan Properties and Hennis Proceedings

On April 6, 2009, Todd C. Hennis (the former President and CEO of the Company), and entities San Juan Corp., and Salem Minerals Inc. (which are substantially owned by Mr. Hennis), served upon the Company a Complaint seeking among other things, a $100,000 payment pursuant to the option agreement, and release from his shareholder lock-up agreement and from Rule 144 trading restrictions on approximately 51,500,000 pre-split (10,300 post-split), shares of Class A Common Stock held by Hennis.  On May 12, 2009, a counter-claim with jury demand was filed against Mr. Hennis and his entities for wrongful conversion, breach of duty of loyalty, lack of good faith, breach of fiduciary duty, and significant conflicts of interest.

Hennis filed a Motion for Summary Judgment on October 16, 2009.  On September 2, 2010, the court granted partial summary judgment in favor of Mr. Hennis and awarded him damages of $230,707.  On September 22, 2010, the court awarded additional damages in the amount of $114,896 to Mr. Hennis for a total of $345,603, which has been recorded as an accrued liability by the Company as of August 31, 2011 and 2012.  On March 25, 2011, the court awarded an additional $58,989 to Hennis for attorney’s fees, which has been accrued as of August 31, 2011 and 2012.  However, on April 5, 2012 the court of appeals remanded the award of attorneys’ fees and therefore the accrual has been reduced by $58,989.

The Company filed motions for (a) a new trial on all or part of the issues; (b) an amendment of findings; and (c) an amendment of judgment pursuant to C.R.C.P. Rule 58(a).  On March 25, 2011, the court evoked C.R.C.P. 59(j) and denied the post-trial motions by not ruling on them.

The Company filed a Notice of Appeal with the Colorado Court of Appeals on January 7, 2011.  On April 5, 2012, the Colorado Court of Appeals affirmed the judgment ($345,603), however the order awarding plaintiffs their trial attorney fees ($58,989) and costs was vacated, and the case was remanded to the district court for further proceedings.  The Company filed a Petition for Rehearing in the Court of Appeals on April 9, 2012, which was denied on May 17, 2012.

On August 31, 2012, The Company filed a Petition of Certiorari with the Colorado Supreme Court.  On May 23, 2013, the Supreme Court denied the Company’s Petition of Certiorari.  The judgment ($345,603) is affirmed, the order awarding plaintiffs their trial attorney fees ($58,989) and costs is vacated, and the case is remanded for further proceedings.

On June 5, 2013, Hennis filed a motion to release funds of approximately $85,300, from the San Juan County court registry.  These funds were placed into the court registry as a result of a garnishment order on April 18, 2011.

Post Judgment Collection Actions by Hennis

On August 23, 2013, Hennis attempted to have a receiver appointed to take control over the Company by means of an Ex Parte Motion for the Appointment of a Receiver filed in Jefferson County, Colorado.  This motion (kept secret from the Company), was denied by the court on September 4, 2013.  The court’s order stated, “Should plaintiffs wish to pursue their Rule 66 motion, they should serve their complaint and motion upon defendant and, after service is effected, contact the court to request a forthwith hearing.”

On September 6, 2013, the Company was served, through its registered agent, with 1) Renewed Motion for Appointment of Receiver, and 2) Verified Complaint, seeking a judicial foreclosure, declaratory judgment, breach of fiduciary duties.

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A hearing on the motion to appoint a receiver was held on November 12 and 15, 2013.  The motion to appoint a receiver was denied on November 19, 2013.  The Company has filed its answer and initial disclosures regarding the underlying complaint regarding judicial foreclosure, declaratory judgment, breach of fiduciary duties, and awaits the court’s scheduling of a case management conference.

On December 20, 2013, Hennis filed a Motion with the Court seeking Judgment on the Pleadings, Alternatively for Summary Judgment, as to Plaintiffs’ First Claim for Relief, that claim being a judicial foreclosure of Defendant’s assets.

On January 6, 2014, Hennis filed a Notice of Appeal with the Colorado Court of Appeals appealing the Court’s November 19, 2013, denial of Hennis’ Renewed Motion for Appointment of Receiver.

Recreation Properties, Thomas A. Warlick

On December 5, 2013, Recreation Properties, Thomas A. Warlick, President, served upon the Company, C. Stephen Guyer, and Lee R. Rice a Complaint alleging; 1) Default Upon a Promissory Note Payable, 2) Breach of Contract, Breach of Fiduciary Duty (Guyer and Rice), and 3) Fraudulent Transfer Under CRS §§ 38-8-105(1)(b) & 106(1).  The Complaint seeks a judgment in favor of Recreation Properties, recovery of funds transferred to Guyer and Rice during the last four years preceding the complaint, and avoidance of the Deeds of Trust granted to Guyer and Rice.

The Company filed its answer on December 26, 2013.  On the same date, the Company filed a Motion to Consolidate this case with the Hennis action described above. On January 24, 2014, the court granted the Company's Motion to Consolidate.

Other Legal Proceedings

The Company is not involved in any other legal proceedings, however mines and mining claims near to the CGFI Mineral Properties are owned by other parties.  Because the various mines possibly have interconnections between adits and tunnels and common stormwater conveyances and treatment sites, the environmental issues are both factually and legally complex. Disputes among the various property owners, over environmental liabilities, responsibility for clean-up and maintenance of the sites and facilities, and responsibility for site remediation continue.

Permitting requirements can be a costly undertaking and we could be at risk for fines and penalties if required permits are not timely in place.

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Item 1A.Risk Factors.

High Degree of Risk

An investment in our securities involves a high degree of risk. You should consider carefully the following risks, along with all of the other information included in this report, before deciding to buy our common stock. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also impair our business operations. If we are unable to prevent events that have a negative effect from occurring, then our business may suffer.

This report, including Management’s Discussion and Analysis or Plan of Operation, contains forward-looking statements that may be materially affected by several risk factors, including those summarized below.

Pending litigation may cause us to loss control of the Pride of the West Mill, and ultimately the entire Company.

On September 6, 2013, the Company was served, through its registered agent, with a Renewed Motion for Appointment of Receiver, and Verified Complaint, seeking a judicial foreclosure, declaratory judgment, and breach of fiduciary duties by Todd C. Hennis, the former president and CEO of the Company.

A hearing on the Motion to Appoint a Receiver was held on November 12 and 15, 2013.  The Motion to Appoint a Receiver was denied on November 19, 2013.  (See “Legal Proceedings” for additional details.)

On December 5, 2013, Recreation Properties, Thomas A. Warlick, President, served upon the Company, C. Stephen Guyer, and Lee R. Rice a Complaint alleging; 1) Default Upon a Promissory Note Payable, 2) Breach of Contract, Breach of Fiduciary Duty (Guyer and Rice), and 3) Fraudulent Transfer Under CRS §§ 38-8-105(1)(b) & 106(1).  The Complaint seeks a judgment in favor of Recreation Properties, recovery of funds transferred to Guyer and Rice during the last four years preceding the complaint, and avoidance of the Deeds of Trust granted to Guyer and Rice.

The Company filed its answer on December 26, 2013.  On the same date, the Company filed a Motion to Consolidate this case with the Hennis action described above.  As of the date of this report, the Company awaits the court’s decision.  (See “Legal Proceedings” for additional details.)

We have incurred losses since our inception in 2004 and may never be profitable which raises doubt about our ability to continue as a going concern.

Since its inception in February 2004, we have not generated revenue and have incurred net losses.  We have a working capital deficit of $3,701,353 at November 30, 2013, have incurred net losses of $636,404 and $1,502,687 for the three months ended November 30, 2013 and 2012, respectively, and have an accumulated deficit during the exploration stage of $30,482,748 for the period from February 11, 2004 (inception) through November 30, 2013.  Accordingly, we have not generated cash flows from operations and have primarily relied upon equity financing, advances from officers, promissory notes, and advances from unrelated parties to fund our operations.

Our management continues to search for additional financing; however, considering the difficult U.S. and global economic conditions along with the substantial turmoil in the capital and credit markets, there is a significant possibility that we will be unable to obtain financing to continue our operations.

As we are in the beginning stages of our exploration activities on the CGFI Mineral Properties, we expect to incur additional losses in the foreseeable future, and such losses may continue to be significant. To become profitable, we must be successful in raising capital to continue with our mill re-activation efforts, exploration activities, meet the work commitment requirements on the CGFI Mineral Properties, discover economically feasible mineralization deposits and establish reserves, successfully develop the properties and finally realize adequate prices on our minerals in the marketplace. It could be years before we receive any revenues from gold and mineral production, if ever. Thus, we may never be profitable.

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These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent registered public accounting firm's report on our audited financial statements as of and for the year ended August 31, 2013.  If we are unable to continue as a going concern, investors will likely lose all of their investment in our company.  The financial statements included in this report do not include any adjustments that might result from the outcome of this uncertainty.   Please see “Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources,” for further information.

We will require significant additional capital to continue our exploration activities, and, if warranted, to develop mining operations.

Under our lease with an option to purchase the King Solomon Mine, we are required to expend $50,000 over three years in the form of a work commitment.  We have expended only minimal amounts toward the King Solomon work commitment.  Management estimates that re-activating the Mill and bringing the Silver Wing and Champion Mines into production will require approximately $11 million of additional funding.

We will be required to raise significantly more capital in order to develop the CGFI Mineral Properties for mining production assuming that economically viable reserves exist. There is no assurance that our investments in the CGFI Mineral Properties will be financially productive. Our ability to obtain necessary funding depends upon a number of factors, including the price of gold and other base metals and minerals which we are able to mine, the status of the national and worldwide economy and the availability of funds in the capital markets. If we are unable to obtain the required financing in the near future for these or other purposes, our exploration activities would be delayed or indefinitely postponed, we would likely lose our lease/options and option to acquire an ownership interest in the CGFI Mineral Properties and this would likely, eventually, lead to failure of our Company. Even if financing is available, it may be on terms that are not favorable to us, in which case, our ability to become profitable or to continue operating would be adversely affected. If we are unable to raise funds to continue our exploration and feasibility work on the CGFI Mineral Properties, or if commercially viable reserves are not present, the market value of our securities will likely decline, and our investors may lose some or all of their investment.

We depend on our Chief Executive Officer and Chief Financial Officer and the loss of these individuals could adversely affect our business.

Our company is completely dependent on our Chief Executive Officer, Lee R. Rice, and on our Chief Financial Officer, C. Stephen Guyer, both of whom are also members of our Board of Directors. As of the date of this report, we only employed three individuals: Messrs. Rice and Guyer and our Director of Operations. Thus, the loss of either Messrs. Rice or Guyer could significantly and adversely affect our business, and certainly the loss of both individuals on or about the same time could result in a complete failure of the Company. We do not carry any life insurance on the lives of either Messrs. Rice or Guyer.

Our stock is subject to a “Global Lock” imposed by the Depository Trust and Clearing Corporation (“DTCC”).

On September 24, 2013, we were notified that DTCC would be placing a “Global Lock” on the company’s Class A stock as a result of actions by a third-party broker-dealer.  On November 11, 2013, DTCC imposed the Global Lock.  Since less than 0.02% of the Company’s Class A common stock shares were held within DTCC, Management chose to not undertake the expense of challenging the Global Lock.  Nevertheless, shares that are held in street name (CEDE & CO.), will not be able to be withdrawn from DTCC without further action.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.Defaults Upon Senior Securities.

None.

Item 4.Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

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Item 6.                      Exhibits and Financial Statement Schedules

Exhibit Index

Exhibit Number	Description
2	Articles of Merger between Colorado Goldfields Inc. (surviving entity) and Garpa Resources, Inc., effective June 18, 2007.  Filed with Form 8-K dated June 20, 2007, and incorporated herein by reference.
3.1	Amended and Restated Bylaws filed as Exhibit 3.1 to Form 8-K dated September 4, 2008 and incorporated herein by reference.
3.2	Amendment to Articles of Incorporation as Exhibit A to Schedule DEF 14C dated November 4, 2010 and incorporated herein by reference.
3.3	Amendment to Articles of Incorporation as Exhibit A to Schedule DEF 14C dated March 9, 2011 and incorporated herein by reference.
3.4	Amendment to Articles of Incorporation as Exhibit A to Schedule DEF 14C dated January 9, 2012, and incorporated herein by reference.
3.5	Amendment to Articles of Incorporation as Exhibit A to Schedule DEF 14C dated October 23, 2012, and incorporated herein by reference.
3.6	Amendment to Articles of Incorporation as Exhibit A to Schedule DEFR 14C dated June 19, 2013, with filing date of June 20, 2013, and incorporated herein by reference.
10.1	Mining Lease Agreement between Colorado Goldfields Inc. and Larry H. Killian dated September 18, 2009.  Filed as Exhibit 10.1 to Form 8-K filed on September 23, 2009 and incorporated herein by reference.
10.2	Mining Lease Agreement between Colorado Goldfields Inc. and Frank J. Montonati and Don Laeding dated September 30, 2009.  Filed as Exhibit 10.1 to Form 8-K filed on October 6, 2009 and incorporated herein by reference.
10.3	Amendment to 2008 Employee and Director Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on April 23, 2010 and incorporated herein by reference.
10.4	Amendment to 2008 Non-Qualified Consultants & Advisors Stock Compensation.  Filed as exhibit 4.1 to Form S-8 filed on October 4, 2010 and incorporated herein by reference.
10.5	Amendment to 2008 Employee and Director Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on October 4, 2010 and incorporated herein by reference.
10.6	Amendment to 2008 Employee and Director Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on June 14, 2011 and incorporated herein by reference.
10.7	Employment Agreement of C. Stephen Guyer dated July 1, 2011.  Filed as Exhibit 10.2 to Form 8-K filed on June 17, 2011, and incorporated herein by reference.
10.8	Purchase Agreement dated as of June 13, 2011, between Algae Farm (USA), Inc. and Colorado Goldfields Inc, filed as exhibit 10.1 to Form 8-K filed on June 17, 2011, and incorporated herein by reference.
10.9	Amendment to 2008 Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on February 28, 2012 and incorporated herein by reference.
10.10	Contract for Purchase of the Silver Wing Mine dated October 31, 2012 between Colorado Goldfields Inc. and Jo Grant Mining, Co., Inc.  Filed as Exhibit 10.1 to Form 8-K filed on November 6, 2012.
10.11	Contract for Purchase of the Champion Mine dated November 2, 2012 between Colorado Goldfields Inc. and Jo Grant Mining, Co., Inc.  Filed as Exhibit 10.2 to Form 8-K filed on November 6, 2012.
10.12	Amendment to 2008 Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on December 12, 2013, and incorporated herein by reference.
10.13	Amendment to 2008 Non-Qualified Consultants & Advisors Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on December 12, 2013 and incorporated herein by reference.
10.14	Amendment to 2008 Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on April 18, 2013, and incorporated herein by reference.
10.15	Amendment to 2008 Non-Qualified Consultants & Advisors Stock Compensation Plan.  Filed as exhibit 4.1 to Form S-8 filed on April 18, 2013, and incorporated herein by reference.
14	Code of Business Conduct and Ethics.  Filed as Exhibit 14 to Form 8-K filed February 20, 2008, and incorporated herein by reference.
31.1	Certification Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by the Principal Executive Officer.*
31.2	Certification Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by the Principal Financial Officer.*
32.1	Certification Required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Principal Executive Officer.*
32.2	Certification Required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Chief Financial Officer.*
101††	The following financial statements from Colorado Goldfields Inc.’s Quarterly Report on Form 10-Q for the three months ended November 30, 2013 as filed with the SEC on January 29, 2014, formatted in XBRL, as follows:
	(i) the Condensed Consolidated Balance Sheets
	(ii) the Condensed Consolidated Statement of Income
	(iii) the Condensed Consolidated Statements of Cash Flows

____________

*           Filed herewith.

††           As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

29

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Colorado Goldfields Inc.
By:	/s/Lee R. Rice
	Lee R. Rice
	Chief Executive Officer
By:	/s/C. Stephen Guyer
	C. Stephen Guyer
	Chief Financial Officer & Principal Accounting Officer

January 31, 2014

30

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

(Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

I, Lee R. Rice, certify that:

1.           I have reviewed this Interim Report on Form 10-Q of Colorado Goldfields Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Interim report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Lee R. Rice

Lee R. Rice

Chief Executive Officer

January 31, 2014

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

(Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002)

I, C. Stephen Guyer, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of Colorado Goldfields Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Interim report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ C. STEPHEN GUYER

C. Stephen Guyer

Chief Financial Officer

(Principal Accounting Officer and Principal Financial Officer)

January 31, 2014

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

(Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Colorado Goldfields Inc. (the “Company”) for the period ended November 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18.  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Lee R. Rice, Chief Executive Officer of the Company, certify, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LEE R. RICE

Lee R. Rice

Chief Executive Officer

January 31, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

(Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Colorado Goldfields Inc. (the “Company”) for the period ended November 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, C. Stephen Guyer, Chief Financial Officer of the Company, certify, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ C. STEPHEN GUYER

C. Stephen Guyer

Chief Financial Officer

(Principal Accounting Officer and Principal Financial Officer)

January 31, 2014

XML

3. Property, Plant and Equipment (Details) (USD $)	Nov. 30, 2013	Aug. 31, 2013
Property Plant And Equipment Details
Computer equipment	$ 5,179	$ 5,179
Mobile mining equipment	5,000	5,000
Land and mill	1,434,846	1,434,846
Gross	1,445,025	1,445,025
Less accumulated depreciation	(9,074)	(8,819)
Net	$ 1,435,951	$ 1,436,206

XML

3. Property, Plant and Equipment

3 Months Ended

Nov. 30, 2013

Property, Plant and Equipment [Abstract]

3. Property, Plant and Equipment

On June 29, 2007, the Company acquired the Mill located in Howardsville, Colorado. The cost of the Mill was $1,400,677.  In connection with the acquisition, the Company entered into a $650,000 mortgage with the seller, which is collateralized by the mill property and bears interest at 12% per year.  All unpaid principal was originally due June 29, 2009.  The due date on the mortgage was extended and was due in full on December 1, 2013, and is currently in default.  During the three months ended November 30, 2013, $15,000 of the mortgage was paid through the issuance of convertible notes (Note 7).

Interest expense in connection with the Mill mortgage for the three months ended November 30, 2013 and 2012 was $5,739 and $13,295, respectively.

In connection with the acquisition of the Mill, the Company replaced a financial warranty that the seller had provided to the DRMS in the amount $318,654.  During the 2011 fiscal year, the DRMS required and the Company provided an additional $196,476 of financial warranty.  As of November 30, 2013, the total funds, which are held as a restricted cash deposit with the State of Colorado, related to the Mill financial warranty is $515,130.

Property, plant and equipment consist of the following as of November 30, 2013 and August 31, 2013:

	November 30, 2013			August 31, 2013
Computer equipment	$	5,179		$	5,179
Mobile mining equipment		5,000			5,000
Land and mill		1,434,846			1,434,846
		1,445,025			1,445,025
Less accumulated depreciation		(9,074	)		(8,819	)
	$	1,435,951		$	1,436,206

Depreciation expense was $255 and $1,153 for the three months ended November 30, 2013 and 2012, respectively.  Property, plant and equipment are depreciated on a straight line basis over their estimated useful lives ranging from three to five years.  However, a significant portion of the Company’s property, plant and equipment has not yet been placed in service and accordingly is not being depreciated.

XML

7. Convertible notes (Details Narrative) (USD $)			3 Months Ended
	Nov. 30, 2013	Aug. 31, 2013	Nov. 30, 2013 Delaware Partnership Investor	Nov. 30, 2013 New York Private Investors	Nov. 30, 2013 San Diego Private Investor	Nov. 30, 2013 New York Alternative Investment Firm
Discount recorded for convertible notes			$ 15,000
Convertible notes were converted into common stock			29,976	18,800	6,925	24,585
Discount amortization			69,527	48,643	18,009	24,555
Note carrying value			168,479	122,359	30,286	71,401
Unamortized discount	$ 262,868	$ 386,601	$ 114,121	$ 45,461	$ 37,789	$ 65,498

XML

6. Promissory notes payable (Details Narrative) (USD $)	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
September 12, 2011 Note
Interest Expense	$ 3,288	$ 1,596
December 22, 2011 Note
Interest Expense	$ 394	$ 389

XML

8. Derivative Liabilities (Details) (USD $)	3 Months Ended	12 Months Ended
	Nov. 30, 2013	Aug. 31, 2012
Minimum
Expected term	0 months	0 months
Volatility, Min	494.00%	232.00%
Risk-free interest rate	0.02%	0.02%
Dividend yield	$ 0	$ 0
Maximum
Expected term	12 months	12 months
Volatility, Min	631.00%	922.00%
Risk-free interest rate	0.16%	0.19%
Dividend yield	$ 0	$ 0

XML

8. Derivative Liabilities (Details 1) (USD $)	3 Months Ended
	Nov. 30, 2013
Derivative Liabilities Details 1
Beginning Balance	$ 1,424,115
Issuance of derivative liabilities	34,500
Derecognition of derivative liabilities related to conversion of convertible debt	(186,946)
Gain on derivative liabilities	(83,333)
Ending Balance	$ 1,188,336

XML

2. Summary of Significant Account Policies

3 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

2. Summary of Significant Account Policies

Basis of Presentation

The accompanying interim financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  The financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at November 30, 2013 and the results of operations and cash flows of the Company for the three months ended November 30, 2013 and 2012, respectively.  Operating results for the three months ended November 30, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2014.

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and footnotes thereto included in its Annual Report on Form 10-K for the year ended August 31, 2013, which may be retrieved from the SEC.

Basic and Diluted Net Loss per Share

Basic earnings (loss) per share (“EPS”) is computed by dividing net loss attributable to common stockholders (numerator) by the weighted average number of shares of the Class A Common Stock outstanding (denominator) during the period.  During the year ended August 31, 2011, the Company issued shares of Class B Common Stock, which are not publicly-traded.  The Class B Common Stock share dividends equally with Class A Common Stock, and are defined as participating securities under US GAAP; however, they have no contractual obligation to share in losses of the Company.  The Company has therefore not included the Class B Common Stock in determining basic EPS.  Diluted EPS gives effect to all potential dilutive common shares outstanding during the periods using the treasury stock method (for options and warrants) and the two-class method (for Class B common stock).  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.  For the three months ended November 30, 2013 and 2012, the effect of the conversion of outstanding debt and Class B common shares would have been anti-dilutive.

The following table represents the potential dilutive securities excluded from the calculation of diluted loss per share.

	November 30, 2013		November 30, 2012
Class B Common Stock		490,371,533		490,371,533
Convertible debt		14,265,953,226		14,570

Effective September 12, 2012, the Financial Regulatory Authority, Inc. (“FINRA”), approved a 1 for 5,000 reverse stock split.  All references to Class A common stock in these financial statements have been adjusted to reflect the post-reverse split amounts.

Effective May 13, 2013 the FINRA approved a further 1 for 500 reverse stock split.  All references to Class A common stock in these financial statements have been adjusted to reflect the post-reverse split amounts.

Mining Rights and Claims

The Company has determined that its mining rights and claims meet the definition of mineral rights, as defined by accounting standards, and are tangible assets.  As a result, the costs of mining rights are initially capitalized as tangible assets when purchased.  If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserves.  The Company’s rights to extract minerals are contractually limited by time.  However, the Company has the ability to extend the leases (Note 4).  For mining rights in which proven and probable reserves have not yet been established, the Company assesses the carrying value for impairment at the end of each reporting period.  The Company recorded impairment charges of approximately $2,604 and $21,910 during the three months ended November 30, 2013 and 2012, respectively.

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 in the principal or most advantageous market.  The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 – assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions.  Unobservable inputs require significant management judgment or estimation.  In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.

As of November 30, 2013, the Company had the following financial assets and liabilities that are measured at fair value:

	Level 1		Level 2		Level 3
Restricted cash		-	$	515,428		-
Derivative liabilities		-	$	1,188,336		-

The fair values of financial instruments, which include cash, accounts payable, short-term notes payable, and convertible debt, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.  The fair value of amounts due to related parties are not practicable to estimate, due to the related party nature of the underlying transactions.

Asset Retirement Obligation

The fair value of a liability for an asset retirement obligation is required to be recognized in the period that it is incurred if a reasonable estimate of fair value can be made.  In connection with the Company’s acquisition of the Mill in June 2007, an asset retirement obligation of $500,000 was estimated and recorded.  The associated asset retirement costs were capitalized as part of the carrying amount of the Mill (See Note 3).  Accretion expense is recorded in each subsequent period to recognize the estimated changes in the liability resulting from the passage of time.  The Company recorded no accretion expense for either the three months ended November 30, 2013 or 2012, respectively.  Changes resulting from revisions to the original fair value of the liability are recognized as an increase or decrease in the carrying amount of the liability and the related asset retirement costs capitalized as part of the carrying amount of the long-lived asset.

During fiscal year 2012, the Company re-evaluated the original fair value of the asset retirement obligation as it relates to the Mill.  Unique to this asset, the reclamation permit for the Mill requires that the cost of retirement (reclamation), be calculated by the DRMS on a continuing basis, and a financial warranty be provided to guarantee that obligation.

As of November 30, 2013, the State of Colorado Division of Reclamation, Mining, and Safety has determined that $515,130 would be required to close and reclaim the asset and the Company has placed those funds as cash held as a restricted cash deposit with the State of Colorado.

Recent Accounting Pronouncements

Management has evaluated recently issued accounting pronouncements to determine their applicability and does not believe that any of these pronouncements will have a significant impact on the Company's financial statements.

XML

9. Stockholders’ Deficit (Details Narrative) (USD $)	3 Months Ended
	Nov. 30, 2013
Stockholders Deficit Details Narrative
Debt and derivative liabilities converted into shares of restricted Class A Common Stock	$ 269,352
Shares of restricted Class A Common Stock issued for conversion of debt and derivative liabilities	309,295,910

XML

Balance Sheets (Unaudited) (USD $)	Nov. 30, 2013	Aug. 31, 2013
ASSETS
Cash	$ 2,124	$ 15,092
Prepaid expenses and other	0	48,558
Total Current Assets	2,124	63,650
Non-Current Assets
Property, plant and equipment, net (Note 3)	1,435,951	1,436,206
Mining rights and claims (Note 4)	150,000	152,604
Restricted cash (Note 3)	515,428	515,428
Deferred financing costs	23,996	43,790
Other	4,743	4,743
Total Non-Current Assets	2,130,118	2,152,771
Total Assets	2,132,242	2,216,421
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	601,540	379,474
Accrued liabilities	844,998	655,075
Convertible notes, less unamortized discount of $262,868 and $386,601 (Note 7)	392,525	284,856
Derivative liabilities (Note 8)	1,188,336	1,424,115
Promissory note payable, including accrued interest (Note 6)	122,930	119,248
Notes payable, including accrued interest - related parties (Note 5)	361,831	357,258
Mortgage notes payable, including accrued interest (Note 3)	191,317	200,578
Total Current Liabilities	3,703,477	3,420,604
Non-Current Liabilities
Asset retirement obligation	515,500	515,500
Total Non-Current Liabilities	515,500	515,500
Total Liabilities	4,218,977	3,936,104
Stockholders' Deficit (Note 9)
Additional paid in capital	28,010,100	28,050,044
Donated capital	29,250	29,250
Deficit accumulated during the exploration stage	(30,482,748)	(29,846,344)
Total Stockholders' Deficit	(2,086,735)	(1,719,683)
Total Liabilities and Stockholders' Deficit	2,132,242	2,216,421
Class A Common Stock
Stockholders' Deficit (Note 9)
Class A common stock, 1,000,000,000 shares authorized, $0.001 par value; 356,662,566 and 47,366,656 issued and outstanding, respectively; Class B common stock, 500,000,000 shares authorized, $0.001 par value; 490,371,533 shares issued and outstanding, respectively	356,663	47,367
Class B Common Stock
Stockholders' Deficit (Note 9)
Class A common stock, 1,000,000,000 shares authorized, $0.001 par value; 356,662,566 and 47,366,656 issued and outstanding, respectively; Class B common stock, 500,000,000 shares authorized, $0.001 par value; 490,371,533 shares issued and outstanding, respectively	$ 0	$ 0

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Statements of Stockholders' Equity (Deficit) (Unaudited) (USD $)	Class A Common Stock	Class B Common Stock	Additional Paid-In Capital	Donated Capital	Deficit Accumulated During the Exploration Stage	Total
Beginning balance, Amount at Feb. 10, 2004	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Beginning balance, Shares at Feb. 10, 2004	0	0
Issuance of common stock for cash, shares	21
Issuance of common stock for cash, amount	0		2,500			2,500
Donated services and rent				4,500		4,500
Net loss					(5,898)	(5,898)
Ending balance, Amount at Aug. 31, 2004	0	0	2,500	4,500	(5,898)	1,102
Ending balance, Shares at Aug. 31, 2004	21	0
Issuance of common stock for cash, shares	25
Issuance of common stock for cash, amount	0		53,750			53,750
Donated services and rent				9,000		9,000
Net loss					(35,319)	(35,319)
Ending balance, Amount at Aug. 31, 2005	0	0	56,250	13,500	(41,217)	28,533
Ending balance, Shares at Aug. 31, 2005	46	0
Donated services and rent				9,000		9,000
Net loss					(36,148)	(36,148)
Ending balance, Amount at Aug. 31, 2006	0	0	56,250	22,500	(77,365)	1,385
Ending balance, Shares at Aug. 31, 2006	46	0
Donated services and rent				6,750		6,750
Net loss					(300,193)	(300,193)
Ending balance, Amount at Aug. 31, 2007	0	0	56,250	29,250	(377,558)	(292,058)
Ending balance, Shares at Aug. 31, 2007	46
Issuance of common stock for cash, shares	4
Issuance of common stock for cash, amount	0		3,002,244			3,002,244
Shares issued for services, shares	4
Shares issued for services, amount	0		869,739			869,739
Stock-based compensation - options			895,209			895,209
Net loss					(3,721,021)	(3,721,021)
Ending balance, Amount at Aug. 31, 2008	0		4,823,442	29,250	(4,098,579)	754,113
Ending balance, Shares at Aug. 31, 2008	54
Shares issued for services, shares	148
Shares issued for services, amount	0		4,241,283			4,241,283
Stock-based compensation - options			4,094			4,094
Issuance of common stock to satisfy accounts payable, shares	12
Issuance of common stock to satisfy accounts payable, amount	0		370,015			370,015
Stock issued to beneficial owners of Class A Common Stock, shares		35,732,285
Stock issued to beneficial owners of Class A Common Stock, amount
Forgiveness of related party debt and accrued interest			288,361			288,361
Net loss					(5,281,857)	(5,281,857)
Ending balance, Amount at Aug. 31, 2009	0	0	9,727,195	29,250	(9,380,436)	376,009
Ending balance, Shares at Aug. 31, 2009	214	35,732,285
Shares issued for services, shares	368
Shares issued for services, amount	0		1,950,760			1,950,760
Issuance of common stock to satisfy accounts payable, shares	58
Issuance of common stock to satisfy accounts payable, amount	0		343,828			343,828
Stock issued to beneficial owners of Class A Common Stock, shares		5,012,068
Stock issued to beneficial owners of Class A Common Stock, amount
Shares issued for mining rights, shares	50
Shares issued for mining rights, amount	0		407,500			407,500
Shares issued for convertible debt, shares	19
Shares issued for convertible debt, amount	0		107,127			107,136
Net loss					(3,660,418)	(3,660,418)
Ending balance, Amount at Aug. 31, 2010	0	0	12,536,419	29,250	(13,040,854)	(475,185)
Ending balance, Shares at Aug. 31, 2010	709	40,744,353
Shares issued for services, shares	1,207
Shares issued for services, amount	1		2,424,286			2,424,287
Issuance of common stock to satisfy accounts payable, shares	233
Issuance of common stock to satisfy accounts payable, amount	0		459,024			459,024
Shares issued for mining rights, shares	100
Shares issued for mining rights, amount			150,000			150,000
Shares issued for convertible debt, shares	859
Shares issued for convertible debt, amount	1		2,771,501			2,771,502
Stock issued to officers, shares		449,623,244
Stock issued to officers, amount
Class B warrants exercised and shares issued, shares		3,936
Class B warrants exercised and shares issued, amount			570			570
Net loss					(6,163,394)	(6,163,394)
Ending balance, Amount at Aug. 31, 2011	2	0	18,341,800	29,250	(19,204,248)	(833,196)
Ending balance, Shares at Aug. 31, 2011	3,108	490,371,533
Shares issued for services, shares	2,236
Shares issued for services, amount	2		999,795			999,797
Issuance of common stock to satisfy accounts payable, shares	1,026
Issuance of common stock to satisfy accounts payable, amount	1		450,206			450,207
Shares issued for Champion and Silver Wing Mines, Amount						0
Shares issued for convertible debt, shares	3,660
Shares issued for convertible debt, amount	4		1,892,840			1,892,844
Issuance of common stock to satisfy accrued liabilities, shares	1,265
Issuance of common stock to satisfy accrued liabilities, amount	1		682,559			682,560
Net loss					(4,299,576)	(4,299,576)
Ending balance, Amount at Aug. 31, 2012	10	0	22,367,200	29,250	(23,503,824)	(1,107,364)
Ending balance, Shares at Aug. 31, 2012	11,295	490,371,533
Shares issued to round fractional shares due to stock split, Shares	361
Shares issued for services, shares	4,967,177
Shares issued for services, amount	4,967		969,039			974,006
Issuance of common stock to satisfy accounts payable, shares	2,077,602
Issuance of common stock to satisfy accounts payable, amount	2,078		555,116			557,194
Shares issued for mining rights, shares	500
Shares issued for mining rights, amount	1		62,499			62,500
Shares issued for Champion and Silver Wing Mines, Shares	172,000
Shares issued for Champion and Silver Wing Mines, Amount	172		184,828			(185,000)
Shares issued for convertible debt, shares	12,136,178
Shares issued for convertible debt, amount	12,137		1,858,408			1,870,545
Issuance of common stock to satisfy accrued liabilities, shares	27,988,748
Issuance of common stock to satisfy accrued liabilities, amount	27,989		1,392,133			1,420,122
Issuance of common stock for work commitment, Shares	12,795
Issuance of common stock for work commitment, Amount	13		660,821			660,834
Net loss					(6,342,520)	(6,342,520)
Ending balance, Amount at Aug. 31, 2013	47,367	0	28,050,044	29,250	(29,846,344)	(1,719,683)
Ending balance, Shares at Aug. 31, 2013	47,366,656	490,371,533
Shares issued for convertible debt, shares	309,295,910
Shares issued for convertible debt, amount	309,296		(39,944)			269,352
Net loss					(636,404)	(636,404)
Ending balance, Amount at Nov. 30, 2013	$ 356,663	$ 0	$ 28,010,100	$ 29,250	$ (30,482,748)	$ (2,086,735)
Ending balance, Shares at Nov. 30, 2013	356,662,566	490,371,533

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2. Summary of Significant Account Policies (Details)	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Class B Common Stock
Potential dilutive securities excluded from the calculation of diluted loss per share	490,371,533	490,371,533
Convertible debt
Potential dilutive securities excluded from the calculation of diluted loss per share	14,265,953,226	14,570

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2. Summary of Significant Account Policies (Details Narrative) (USD $)	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Aug. 31, 2013
Impairment charges	$ 2,604	$ 21,910
Restricted cash	515,428		515,428
Held by State of Colorado for asset retirement obligation
Restricted cash	$ 515,130

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1. Organization, Nature of Business, Going Concern and Managements Plans

3 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

1. Organization, Nature of Business, Going Concern and Management’s Plans

Organization and Nature of Business

Colorado Goldfields Inc. (the “Company”) was incorporated in the State of Nevada on February 11, 2004, under the name of Garpa Resources, Inc. On June 18, 2007, the Company changed its name to Colorado Goldfields Inc. (the “Company”). The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting for Development Stage Enterprises.” The Company’s principal business is the reactivation of a mill facility, and acquisition and exploration of mineral resources.  The Company has not presently determined whether the properties it has acquired and intends to acquire contain mineral reserves that are economically recoverable.

Going Concern and Management’s Plans

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  Since its inception in February 2004, the Company has not generated revenue and has incurred net losses.  The Company has a working capital deficit of $3,701,353 at November 30, 2013, has incurred net losses of $636,404 and $1,502,687 for the three months ended November 30, 2013 and 2012, respectively, and has an accumulated deficit during the exploration stage of $30,482,748 for the period from February 11, 2004 (inception) through November 30, 2013.  Accordingly, it has not generated cash flows from operations and has primarily relied upon equity financing, advances from officers, promissory notes, and advances from unrelated parties to fund its operations.

The Company is dependent upon the State of Colorado Division of Reclamation, Mining and Safety (“DRMS”) and State of Colorado Mined Land Reclamation Board (“MLRB”), approving an amendment to the existing reclamation permit for the Company’s Pride of the West Mill (“the Mill”).  The amendment would cure a current cease and desist order, which was issued in 2005, and allow the Mill to become operational.

In December 2010, the Company presented a proposed permit amendment (“AM-02”) to the MLRB.  While portions of that permit amendment were approved, there remained deficiencies that required additional work.

The Company prepared additional material for consideration by the DRMS and the MLRB.  Management submitted a new permit amendment application (“AM-03”), to the DRMS on January 27, 2012 and April 23, 2012.  On August 9, 2012, the DRMS approved, with conditions, AM-03.

The core of the permit consists of nine Environmental Protection Facilities (“EPFs”), which are: 1) Mill Building, 2) Ore Stockpile Area, 3) Laboratory Facility, 4) Leach Plant Building, 5) Flood Protection Dike, 6) Plant Waste Water Disposal, 7) Groundwater intercept Drain, 8) Upland Stormwater Intercept Ditch, and 9) Mill Tailings Repository.  The DRMS approved the first eight EPFs, and work has commenced in these areas.

The conditions specified by the DRMS regard the ninth EPF, which is the Mill Tailings Repository.  The DRMS requested 1) additional geotechnical substrate stability analysis, 2) structure specific engineering designs for the cover of the repository, 3) analysis of the repository’s reserve capacity, 4) recalculation of financial warranty.  The Company estimates that the conditions will be satisfied by June 2014.

The Company currently faces a severe working capital shortage and is not presently generating any revenues.  The Company will need to obtain additional capital to fund its operations, continue mining exploration activities, fulfill its obligations under its mineral property lease/option agreements, and satisfy existing creditors.  In addition, the Company’s ability to continue as a going concern is subject to the successful resolution of outstanding litigation (Note 10.)

These circumstances raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts or classification of liabilities that may result from the possible inability of the Company to continue as a going concern.  Management’s plans with regards to these conditions are described below.

The Company continues to explore sources of additional financing to satisfy its current operating requirements.

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into various convertible debt funding arrangements described below that provided a total of $954,304 in capital.

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into funding arrangements with an institutional investor (the “Delaware Partnership Investor”), under which the Delaware Partnership Investor has provided convertible debt financing to the Company of $412,000 ($15,000 during the three months ended November 30, 2013) (Note 7).

During the years ended August 31, 2013 and through November 30, 2013, the Company also entered into funding arrangements for a total of $220,820 (nil during the three months ended November 30, 2013), with a group of New York private investors in the form of convertible notes (Note 7).

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into funding arrangements with a New York Alternative Investment Firm, under which the investors have provided convertible debt financing to the Company of $246,484 (nil during the three months ended November 30, 2013) (Note 7).

During the year ended August 31, 2013 and through November 30, 2013, the Company entered into funding arrangements with a San Diego private investor, under which the investor has provided convertible debt financing to the Company of $75,000 (nil during the three months ended November 30, 2013) (Note 7).

Considering the difficult U.S. and global economic conditions, along with the substantial stability problems in the capital and credit markets, there is a significant possibility that the Company will be unable to obtain financing to continue its operations.

There is no assurance that required funds during the next twelve months or thereafter will be generated from operations, or that those funds will be available from external sources, such as debt or equity financings or other potential sources.  The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business.  Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders.  All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing.

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Balance Sheets (Unaudited) (Parenthetical) (USD $)	Nov. 30, 2013	Aug. 31, 2013
Convertible notes, unamortized discount	$ 262,868	$ 386,601
Class A Common Stock
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	356,662,566	47,366,656
Common stock, shares outstanding	356,662,566	47,366,656
Class B Common Stock
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	490,371,533	490,371,533
Common stock, shares outstanding	490,371,533	490,371,533

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2. Summary of Significant Account Policies (Policies)

3 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  The financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at November 30, 2013 and the results of operations and cash flows of the Company for the three months ended November 30, 2013 and 2012, respectively.  Operating results for the three months ended November 30, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2014.

These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and footnotes thereto included in its Annual Report on Form 10-K for the year ended August 31, 2013, which may be retrieved from the SEC.

Basic and Diluted Net Loss per Share

Basic and Diluted Net Loss per Share

Basic earnings (loss) per share (“EPS”) is computed by dividing net loss attributable to common stockholders (numerator) by the weighted average number of shares of the Class A Common Stock outstanding (denominator) during the period.  During the year ended August 31, 2011, the Company issued shares of Class B Common Stock, which are not publicly-traded.  The Class B Common Stock share dividends equally with Class A Common Stock, and are defined as participating securities under US GAAP; however, they have no contractual obligation to share in losses of the Company.  The Company has therefore not included the Class B Common Stock in determining basic EPS.  Diluted EPS gives effect to all potential dilutive common shares outstanding during the periods using the treasury stock method (for options and warrants) and the two-class method (for Class B common stock).  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.  For the three months ended November 30, 2013 and 2012, the effect of the conversion of outstanding debt and Class B common shares would have been anti-dilutive.

The following table represents the potential dilutive securities excluded from the calculation of diluted loss per share.

	November 30, 2013		November 30, 2012
Class B Common Stock		490,371,533		490,371,533
Convertible debt		14,265,953,226		14,570

Effective September 12, 2012, the Financial Regulatory Authority, Inc. (“FINRA”), approved a 1 for 5,000 reverse stock split.  All references to Class A common stock in these financial statements have been adjusted to reflect the post-reverse split amounts.

Effective May 13, 2013 the FINRA approved a further 1 for 500 reverse stock split.  All references to Class A common stock in these financial statements have been adjusted to reflect the post-reverse split amounts.

Mining Rights and Claims

Mining Rights and Claims

The Company has determined that its mining rights and claims meet the definition of mineral rights, as defined by accounting standards, and are tangible assets.  As a result, the costs of mining rights are initially capitalized as tangible assets when purchased.  If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserves.  The Company’s rights to extract minerals are contractually limited by time.  However, the Company has the ability to extend the leases (Note 4).  For mining rights in which proven and probable reserves have not yet been established, the Company assesses the carrying value for impairment at the end of each reporting period.  The Company recorded impairment charges of approximately $2,604 and $21,910 during the three months ended November 30, 2013 and 2012, respectively.

Fair Value Measurements

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 in the principal or most advantageous market.  The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 – assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions.  Unobservable inputs require significant management judgment or estimation.  In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.

As of November 30, 2013, the Company had the following financial assets and liabilities that are measured at fair value:

	Level 1		Level 2		Level 3
Restricted cash		-	$	515,428		-
Derivative liabilities		-	$	1,188,336		-

The fair values of financial instruments, which include cash, accounts payable, short-term notes payable, and convertible debt, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.  The fair value of amounts due to related parties are not practicable to estimate, due to the related party nature of the underlying transactions.

Asset Retirement Obligation

Asset Retirement Obligation

The fair value of a liability for an asset retirement obligation is required to be recognized in the period that it is incurred if a reasonable estimate of fair value can be made.  In connection with the Company’s acquisition of the Mill in June 2007, an asset retirement obligation of $500,000 was estimated and recorded.  The associated asset retirement costs were capitalized as part of the carrying amount of the Mill (See Note 3).  Accretion expense is recorded in each subsequent period to recognize the estimated changes in the liability resulting from the passage of time.  The Company recorded no accretion expense for either the three months ended November 30, 2013 or 2012, respectively.  Changes resulting from revisions to the original fair value of the liability are recognized as an increase or decrease in the carrying amount of the liability and the related asset retirement costs capitalized as part of the carrying amount of the long-lived asset.

During fiscal year 2012, the Company re-evaluated the original fair value of the asset retirement obligation as it relates to the Mill.  Unique to this asset, the reclamation permit for the Mill requires that the cost of retirement (reclamation), be calculated by the DRMS on a continuing basis, and a financial warranty be provided to guarantee that obligation.

As of November 30, 2013, the State of Colorado Division of Reclamation, Mining, and Safety has determined that $515,130 would be required to close and reclaim the asset and the Company has placed those funds as cash held as a restricted cash deposit with the State of Colorado.

Recent accounting pronouncements

Recent Accounting Pronouncements

Management has evaluated recently issued accounting pronouncements to determine their applicability and does not believe that any of these pronouncements will have a significant impact on the Company's financial statements.

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Document and Entity Information	3 Months Ended
	Nov. 30, 2013	Jan. 29, 2014 Class A Common Stock	Jan. 29, 2014 Class B Common Stock
Entity Registrant Name	COLORADO GOLDFIELDS INC.
Entity Central Index Key	0001344394
Document Type	10-Q
Document Period End Date	Nov. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		356,662,566	490,371,533
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014

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2. Summary of Significant Account Policies (Tables)

3 Months Ended

Nov. 30, 2013

Accounting Policies [Abstract]

Potential dilutive securities excluded from diluted loss per share

	November 30, 2013		November 30, 2012
Class B Common Stock		490,371,533		490,371,533
Convertible debt		14,265,953,226		14,570

Financial assets and liabilities that are measured at fair value

	Level 1		Level 2		Level 3
Restricted cash		-	$	515,428		-
Derivative liabilities		-	$	1,188,336		-

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Statements of Operations (Unaudited) (USD $)	3 Months Ended			118 Months Ended
	Nov. 30, 2013		Nov. 30, 2012	Nov. 30, 2013
Income Statement [Abstract]
Revenue	$ 0		$ 0	$ 0
Operating expenses
Donated rent	0		0	9,750
Donated services	0		0	19,500
General and administrative	248,608		418,968	17,134,295
Mineral property and exploration costs	77,618		782,342	4,646,766
Professional fees	124,089		41,468	2,269,161
Total operating expenses	(450,315)		(1,242,778)	(24,079,472)
Other income (expense)
Other income	1,350		2,950	196,120
Interest income	0		0	33,781
Gain (loss) gain on derivative liabilities	83,333		98,310	647,441
Interest expense	(270,772)		(361,169)	(7,280,618)
Total other expense	(186,089)		(259,909)	(6,403,276)
Net Loss	$ (636,404)		$ (1,502,687)	$ (30,482,748)
Net Loss Per Common Share - Basic and Diluted		[1]	$ (40.95)
Weighted Average Number of Common Shares Outstanding	184,865,298		36,695

[1] *Amount is less than $(0.01) per share.

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6. Promissory notes payable

3 Months Ended

Nov. 30, 2013

Notes to Financial Statements

6. Promissory notes payable

On September 12, 2011, the Company entered into a settlement agreement and mutual general release with an individual that had originally filed a breach of contract complaint against the Company in November 2009 (the “Plaintiff”) and the Company agreed to pay the Plaintiff $80,000 with interest of 8.00% per annum due in full on September 12, 2013.  The Company has recorded interest expense of $3,288 and $1,596 for the three months ended November 30, 2013 and 2012, respectively.  The Company did not pay the note when it was due and interest is now being accrued at the default rate of 18%.

On December 22, 2011, the Company entered into a promissory note with one of its vendors in exchange for $24,000.  The promissory note bears interest at 6.5% per annum and was due on June 22, 2012.  In June 2012, the note was extended, and was extended again on December 30, 2012 and is now due on December 31, 2013.  All other terms remained the same.  In exchange for extension of the due date, the note is now secured by a Deed of Trust on the Company’s Pride of the West Mill.  If the Company fails to pay off the note on its due date, the entire principal and accrued interest will bear interest at 18% per annum.  The note is currently in default.  The Company recorded interest expense of $394 and $389 for the three months ended November 30, 2013 and 2012, respectively.

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5. Notes payable related parties

3 Months Ended

Nov. 30, 2013

Related Party Transactions [Abstract]

5. Notes payable – related parties

As of November 30, 2013, the Company has notes payable to related parties, including accrued interest, of $96,993 and $264,838 with its chief executive officer (“CEO”) and its chief financial officer (“CFO”), respectively.  In connection with the borrowings, the Company executed unsecured promissory notes (“Notes”) which are due six months from the dates of issue and accrue interest at 6.5% per annum (or 18% per annum, if the Notes are in default).  The funds received in exchange for the Notes have primarily been used by the Company to finance working capital requirements.

On April 8, 2011, the Company secured the amounts owed to the CEO and CFO, with the Mill, and filed Second Deeds of Trust in San Juan County, Colorado.  In connection with the Deeds of Trust, all of the individual Notes were combined into two promissory Notes, and are due in their entirety on December 31, 2013.  These notes are currently in default.  During the three months ended November 30, 2013 and 2012 the Company recorded interest expense of $4,573 for both periods, respectively.

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2. Summary of Significant Account Policies (Details 1) (USD $)	Nov. 30, 2013
Level 1
Restricted cash	$ 0
Derivative liabilities	0
Level 2
Restricted cash	515,428
Derivative liabilities	1,188,336
Level 3
Restricted cash	0
Derivative liabilities	$ 0

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3. Property, Plant and Equipment (Tables)

3 Months Ended

Nov. 30, 2013

Property, Plant and Equipment [Abstract]

Property, plant and equipment

	November 30, 2013			August 31, 2013
Computer equipment	$	5,179		$	5,179
Mobile mining equipment		5,000			5,000
Land and mill		1,434,846			1,434,846
		1,445,025			1,445,025
Less accumulated depreciation		(9,074	)		(8,819	)
	$	1,435,951		$	1,436,206

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9. Stockholders Deficit

3 Months Ended

Nov. 30, 2013

Equity [Abstract]

9. Stockholders' Deficit

Class A Common Stock

During the three months ended November 30, 2013, the Company converted debt and derecognized derivative liabilities totaling $269,352 into 309,295,910 shares of restricted Class A Common Stock.

On April 18, 2013 the Company filed amendments to its two stock compensation plans.  The amendments provided for an additional 50,000,000 pre-split (100,000 post-split), Class A common stock shares to be available for issuance under each of the 2008 Non-qualified Consultants and Advisors Stock Compensation Plan and the 2008 Stock Compensation Plan.  On August 5, 2013, the Company filed additional amendments which provided for an additional 20,000,000 post-split shares to be issued under each plan.  As of November 30, 2013, the Company is authorized to grant up to 20,146,644 shares under the 2008 Stock Compensation Plan (formerly the 2008 Employee Stock Compensation Plan), and 20,140,746 shares under the 2008 Non-qualified Consultants and Advisors Stock Compensation Plan of which 7,038,378 have been issued as of November 30, 2013.

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7. Convertible notes

3 Months Ended

Nov. 30, 2013

Notes to Financial Statements

7. Convertible notes

Delaware Partnership Investor

At September 1, 2013, the Company owed the Delaware Partnership Investor $113,195 (net of unamortized discounts of $183,712), under multiple funding arrangements.  During the three months ended November 30, 2013, the Company issued 1 convertible note under a funding arrangement with the Delaware Partnership Investor, totaling $15,000 which bears interest at 10% per annum and matures on September 30, 2014.  Proceeds from the note were used to reduce the mill mortgage.  The note is convertible at any time, at the option of the holder, into shares of Class A common stock of the Company at conversion rates of 40% of the average of the two lowest, or single, volume-weighted average closing prices of the Company’s Class A common stock for the ten trading days immediately prior to the date a conversion notice is received by the Company.  The Company recorded a discount in the amount of $15,000 related to the conversion features on the note issued during the three months ended November 30, 2013 (Note 8).  During the three months ended November 30, 2013, $29,976 of the convertible notes were converted into common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  During the three months ended November 30, 2013, the Company recorded $69,527 of debt discount amortization and the carrying value of the notes was $168,479 (net of unamortized discounts of $114,121) as of November 30, 2013.  On June 18, 2013, the Company secured $278,802 of the amounts owed to the Delaware Partnership Investor, with the Mill, which was filed in San Juan County on September 12, 2013.

New York Private Investors

At September 1, 2013, the Company owed the New York Private Investors $92,517 (net of unamortized discount of $94,103), under multiple funding arrangements.  The notes are under funding arrangements with the group of New York Private Investors, bearing interest at 8% per annum and with maturities between October 25, 2013 and May 29, 2014.  The notes are convertible at any time after 180 days from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at conversion rates of 35%, 45% and 51% of the average of the three lowest volume-weighted average closing prices of the Company’s Class A common stock for the ten or thirty trading days immediately prior to the date a conversion notice is received by the Company.  During the three months ended November 30, 2013, $18,800 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  For the three months ended November 30, 2013, the Company recorded debt discount amortization of $48,643 and the carrying value of the notes as of November 30, 2013 was $122,359 (net of unamortized discounts of $45,461).

New York Alternative Investment Firm

At September 1, 2013, the Company owed the New York Alternative Investment Firm $63,117 (net of unamortized discount of $49,813), under multiple funding arrangements, bearing interest at 12% per annum, with maturities between December 13, 2013 and April 8, 2014.   Proceeds from two of the notes were used to reduce the mill mortgage by $175,984, and are convertible into shares of Class A common stock.  The remaining two notes mature on February 8, 2014.  The four notes are convertible at any time from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at a conversion rate of 45% of the lowest volume-weighted average closing prices of the Company’s Class A common stock for the five trading days immediately prior to the date a conversion notice is received by the Company.  During the three months ended November 30, 2013, $24,585 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  For the three months ended November 30, 2013, the Company recorded debt discount amortization of $24,555 and the carrying value of the notes as of November 30, 2013 was $71,401 (net of unamortized discounts of $65,498).

San Diego Private Investor

At September 1, 2013, the Company owed the San Diego Private Investor $16,027 (net of unamortized discount of $58,973).  The notes are interest free for the first three months, then a one-time interest charge of 12% is applied to the principal balance.  The notes mature on April 10, 2014, June 4, 2014 and August 28, 2014 and are convertible at any time from the date of the note’s execution, at the option of the holder, into shares of Class A common stock of the Company at a conversion rate of the lesser of $1.25 post-split or 60% of the lowest closing price of the Company’s Class A common stock for 25 trading days immediately prior to the date a conversion notice is received by the Company.  During the three months ended November 30, 2013, $6,925 of the convertible notes were converted into Class A common stock (any unamortized debt discount related to the converted notes was immediately charged to interest expense on the day the notes were converted).  For the three months ended November 30, 2013, the Company recorded debt discount amortization of $18,009 and the carrying value of the notes as of November 30, 2013 was $30,286 (net of unamortized discounts of $37,789).

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8. Derivative Liabilities

3 Months Ended

Nov. 30, 2013

Notes to Financial Statements

8. Derivative Liabilities

In accordance with ASC 815-15, Embedded Derivatives, the Company determined that the conversion features of the convertible notes described in Note 7 meet the criteria of an embedded derivative, and therefore the conversion features of the debt have been bifurcated and accounted for as derivatives.  The debt does not meet the definition of “conventional convertible debt” because the number of shares which may be issued upon the conversion of the debt is not fixed.  Therefore, the conversion features, pursuant to ASC 815-40, Contracts in Entity’s Own Equity, have been accounted for as derivative liabilities.  The Company adjusts the fair value of these derivative liabilities to fair value at each reporting date.

The Company uses a valuation pricing model to calculate the fair value of its derivative liabilities.  Key assumptions used to apply this model were as follows:

	Three months ended			Year ended
	November 30, 2013			August 31, 2013
Expected term		0 to 12 months			0 to 12 months
Volatility		494%-631	%		232% - 922	%
Risk-free interest rate		0.02 - 0.16	%		0.02 - 0.19	%
Dividend yield		0	%		0	%

The following table represents the Company’s derivative liability activity for the embedded conversion features for the three months ended November 30, 2013:

Balance at September 1, 2013	$	1,424,115
Issuance of derivative liabilities		34,500
Derecognition of derivative liabilities related to conversion of convertible debt		(186,946	)
Gain on derivative liabilities		(83,333	)
Balance at November 30, 2013	$	1,188,336

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10. Litigation

3 Months Ended

Nov. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

10. Litigation

San Juan Properties and Hennis Proceedings

On April 6, 2009, Todd C. Hennis (the former President and CEO of the Company), and entities San Juan Corp., and Salem Minerals Inc. (which are substantially owned by Mr. Hennis), served upon the Company a Complaint seeking among other things, a $100,000 payment pursuant to the option agreement, and release from his shareholder lock-up agreement and from Rule 144 trading restrictions on approximately 10,300 shares of Class A Common Stock held by Mr. Hennis.  On May 12, 2009, a counter-claim with jury demand was filed against Mr. Hennis and his entities for wrongful conversion, breach of duty of loyalty, lack of good faith, breach of fiduciary duty, and significant conflicts of interest.

Hennis filed a Motion for Summary Judgment on October 16, 2009.  On September 2, 2010, the court granted partial summary judgment in favor of Mr. Hennis and awarded him damages of $230,707.  On September 22, 2010, the court awarded additional damages in the amount of $114,896 to Mr. Hennis for a total of $345,603, which has been recorded as an accrued liability by the Company as of August 31, 2013 and November 30, 2013.  On March 25, 2011, the court awarded an additional $58,989 to Hennis for attorney’s fees, which was accrued as of August 31, 2012.  However, in April 2012, the Court of Appeals remanded the award of attorney’s fees and therefore the accrual has been reduced by $58,989.

The Company filed motions for (a) a new trial on all or part of the issues; (b) an amendment of findings; and (c) an amendment of judgment pursuant to C.R.C.P. Rule 58(a).  On March 25, 2011, the court evoked C.R.C.P. 59(j) and denied the post-trial motions by not ruling on them.

The Company filed a Notice of Appeal with the Colorado Court of Appeals on January 7, 2011.  On April 5, 2012, the Colorado Court of Appeals affirmed the judgment ($345,603), however the order awarding plaintiffs their trial attorney fees ($58,989) and costs was vacated, and the case was remanded to the district court for further proceedings.  The Company filed a Petition for Rehearing in the Court of Appeals on April 9, 2012, which was denied on May 17, 2012.  On December 6, 2013, the Court ordered a hearing be held to address the attorney fee issue.

On August 31, 2012, The Company filed a Petition of Certiorari with the Colorado Supreme Court.  On May 23, 2013, the Supreme Court denied the Company’s Petition of Certiorari.  The judgment ($345,603) is affirmed, the order awarding plaintiffs their trial attorney fees ($58,989) and costs is vacated, and the case is remanded for further proceedings.

On June 5, 2013, Hennis filed a motion to release funds of approximately $85,300, from the San Juan County court registry.  These funds were placed into the court registry as a result of a garnishment order on April 18, 2011.

Post Judgment Collection Actions by Hennis

On August 23, 2013, Hennis attempted to have a receiver appointed to take control over the Company by means of an Ex Parte Motion for the Appointment of a Receiver filed in Jefferson County, Colorado.  This motion was denied by the court on September 4, 2013.  The court’s order stated, “Should plaintiffs wish to pursue their Rule 66 motion, they should serve their complaint and motion upon defendant and, after service is effected, contact the court to request a forthwith hearing.”

On September 6, 2013, the Company was served, through its registered agent, with 1) Renewed Motion for Appointment of Receiver, and 2) Verified Complaint, seeking a judicial foreclosure, declaratory judgment, breach of fiduciary duties.

A hearing on the motion to appoint a receiver was held on November 12 and 15, 2013.  The motion to appoint a receiver was denied on November 19, 2013.  The Company has filed its answer and initial disclosures regarding the underlying complaint regarding judicial foreclosure, declaratory judgment, breach of fiduciary duties, and awaits the court’s scheduling of a case management conference.

On December 20, 2013, Hennis filed a Motion with the Court seeking Judgment on the Pleadings, Alternatively for Summary Judgment, as to Plaintiffs’ First Claim for Relief, that claim being a judicial foreclosure of Defendant’s assets.

On January 6, 2014, Hennis filed a Notice of Appeal with the Colorado Court of Appeals appealing the Court’s November 19, 2013, denial of Hennis’ Renewed Motion for Appointment of Receiver.

Recreation Properties, Thomas A. Warlick

On December 5, 2013, Recreation Properties, Thomas A. Warlick, President, served upon the Company, C. Stephen Guyer (“Guyer”), and Lee R. Rice (“Rice”) a Complaint alleging; 1) Default Upon a Promissory Note Payable, 2) Breach of Contract, Breach of Fiduciary Duty (Guyer and Rice), and 3) Fraudulent Transfer Under CRS §§ 38-8-105(1)(b) & 106(1).  The Complaint seeks a judgment in favor of Recreation Properties, recovery of funds transferred to Guyer and Rice during the last four years preceding the complaint, and avoidance of the Deeds of Trust granted to Guyer and Rice.

The Company filed its answer on December 26, 2013.  On the same date, the Company filed a Motion to Consolidate this case with the Hennis action described above. On January 24, 2014, the court granted the Company's Motion to Consolidate.

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1. Organization, Nature of Business, Going Concern and Managements Plans (Details Narrative) (USD $)	3 Months Ended	12 Months Ended	15 Months Ended
	Nov. 30, 2013	Aug. 31, 2013	Nov. 30, 2013
Organization Nature Of Business Going Concern And Managements Plans Details Narrative
Working capital deficit	$ (3,701,353)		$ (3,701,353)
Deficit accumulated during the exploration stage	(30,482,748)	(29,846,344)	(30,482,748)
Funding provided by convertible debt funding arrangements			954,304
Convertible debt financing provided by Delaware Partnership Investor	15,000	412,000
Convertible debt financing provided by New York private investors	0	220,820
Convertible debt financing provided by a New York Alternative Investment Firm	0	246,484
Convertible debt financing provided by a San Diego private investor	$ 0	$ 75,000

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3. Property, Plant and Equipment (Details Narrative) (USD $)	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012
Depreciation expense	$ 255	$ 1,153
Minimum
Estimated useful lives	3 years
Maximum
Estimated useful lives	5 years

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Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended		118 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Nov. 30, 2013
Cash Flows Used in Operating Activities:
Net loss	$ (636,404)	$ (1,502,687)	$ (30,482,748)
Adjustments to reconcile net loss to net cash used in operating activities:
Donated services and rent	0	0	29,250
Amortization of debt discount and deferred financing costs	207,455	336,529	6,496,584
Depreciation and amortization	255	1,153	151,925
Gain on derivative liabilities	(83,333)	(98,310)	(647,441)
Impairment of mining rights	2,604	21,910	470,000
Stock issued for services	48,558	251,110	11,550,935
Stock issued for Champion and Silver Wing Mines	0	0	185,000
Stock-based compensation - options	0	0	899,303
Accrued interest	62,062	23,411	628,000
Accretion expense on asset retirement obligation	0	0	191,635
Gain on sale of property, plant and equipment	0	0	(92,792)
Change in operating assets and liabilities:
Increase in restricted cash	0	0	(515,428)
Increase in prepaid expenses and other	0	0	(91,062)
Increase in accounts payable	222,066	771,552	3,615,410
Increase in accrued liabilities	166,769	149,250	2,923,796
Increase in other assets	0	0	(4,743)
Net cash used in operating activities	(9,968)	(46,082)	(4,692,376)
Cash Flows from Investing Activities:
Proceeds from sale of property, plant and equipment	0	0	240,632
Acquisition of property, plant and equipment	0	(43,805)	(764,602)
Net cash used in investing activities	0	(43,805)	(523,970)
Cash Flows from Financing Activities:
Advances received	0	0	405,733
Repayment of advances	0	0	(405,733)
Proceeds from notes from related parties	0	0	581,452
Repayment of advances from related party	0	0	(20,596)
Proceeds from note payable	0	0	124,000
Repayment of notes payable	0	(3,166)	(702,819)
(Cost) proceeds from issuance of convertible debt	(3,000)	105,000	2,471,297
Loan acquisition costs		(13,500)	(293,928)
Proceeds from exercise of warrants	0	0	570
Net proceeds from issuance of common stock	0	0	3,058,494
Net cash (used in) provided by financing activities	(3,000)	88,334	5,218,470
(Decrease) increase in cash	(12,968)	(1,553)	2,124
Cash - Beginning of Period	15,092	6,093	0
Cash - End of Period	2,124	4,540	2,124
Supplemental Disclosures:
Interest paid	909	999	103,094
Non-cash investing and financing activities:
Exchange of accounts payable and accrued liabilities for debt	0	0	246,036
Issuance of common stock to satisfy accounts payable	0	80,493	2,180,268
Issuance of common stock to satisfy accrued liabilities	0	125,400	2,102,682
Issuance of common stock for prepaid expenses	0	0	550,159
Issuance of common stock for mining rights	0	62,500	620,000
Issuance of common stock for work commitment	0	660,834	660,834
Exchange of convertible debt for common shares	269,352	414,721	6,911,379
Exchange of mortgage payable for convertible debt	15,000	0	360,984
Exchange of property, plant and equipment for accounts payable	0	0	2,750
Forgiveness of related party debt and accrued interest	0	0	288,361
Change in estimate of asset retirement obligation	0	0	176,135
Acquisition of land and building:
Cash paid	0	0	250,677
Mortgage note given to seller	0	0	650,000
Asset retirement obligation assumed	0	0	500,000
Assets acquired	$ 0	$ 0	$ 1,400,677

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4. Mining Rights and Claims

3 Months Ended

Nov. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

4. Mining Rights and Claims

King Solomon Mine

On September 18, 2009, the Company entered into a lease with an option to purchase the King Solomon Mine, in consideration for which the Company issued 10,000 pre-split (20 post-split) shares of restricted Class A Common Stock valued at $17.50 pre-split ($8,750 post-split) per share (the quoted market price on the date the Company entered into the agreement and obtained the mining rights) totaling $175,000.  The lease/option was for a period of three years.  The stock was restricted from sale during the initial term of the lease.  The lease/option automatically renewed and continued so long as ores, minerals, or metals are produced or sold.  The lease granted the Company the exclusive right to perform exploration, mining, development, production, processing or any other activity that benefits the leased premises and required a minimum work commitment of $50,000 to be expended by the Company for each successive three year term during the term of the lease/option.  The lease also required the Company to pay the lessor a 3.5% NSR on all mineral bearing ores.  In addition, before royalties are computed, 5% of the value of NSR on all materials produced and sold from the mining property must be deducted for the purpose of a contingency reclamation reserve fund for paying potential reclamation costs, up to $200,000.  The Company has the sole and exclusive option to purchase all of lessor's right, title and interest in the property for a total purchase price of $1,250,000, payable in cash or other cash equivalents as mutually agreed by the lessor and the Company.

On October 11, 2012, the Company entered into a three-year extension and renewal of mining lease with option to purchase, effective September 18, 2012, for which the Company issued 250,000 pre-split (500 post-split) shares of restricted Class A Common Stock, with an additional 25,000 pre-split (50 post-split) shares to be issued upon each yearly anniversary.  The mining lease with an option to purchase expires on September 18, 2015.  The Company recorded $62,500 as mining rights and claims based upon the share price on the date of the transaction of $0.25 pre-split ($125 post-split) per share.  The stock is restricted for two years.  The original work commitment outlined above is considered fulfilled.  All other terms and conditions of the original lease remain in effect.

Pay Day and Rage Uranium Claim Group

On June 13, 2011, the Company purchased mineral rights to 63 mining claims in the state of Utah.  The claims are referred to as The Pay Day and Rage Uranium Claim Group and are located in San Juan County northeast of Monticello, Utah.  In consideration for the acquisition of these claims, the Company issued 50,000 pre-split (100 post-split) shares of restricted Class A Common Stock, which had a value of $150,000 on the purchase date, (based on the quoted market price on the date the Company entered into the agreement and obtained the mineral rights).  The shares were issued in two blocks of 25,000 pre-split (50 post-split) shares each and were subject to lock-up provisions for periods of one and two years respectively, during which no sales or other conveyances of the shares could be undertaken.

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5. Notes payable related parties (Details Narrative) (USD $)	3 Months Ended
	Nov. 30, 2013	Nov. 30, 2012	Aug. 31, 2013
Notes payable to related parties	$ 361,831		$ 357,258
Interest expense related party payables	4,573	4,573
CEO
Notes payable to related parties	96,993
CFO
Notes payable to related parties	$ 264,838

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8. Derivative Liabilities (Tables)

3 Months Ended

Nov. 30, 2013

Notes to Financial Statements

Key assumptions used to apply valuation pricing model to calculate the fair value

	Three months ended			Year ended
	November 30, 2013			August 31, 2013
Expected term		0 to 12 months			0 to 12 months
Volatility		494%-631	%		232% - 922	%
Risk-free interest rate		0.02 - 0.16	%		0.02 - 0.19	%
Dividend yield		0	%		0	%

Derivative liability activity

Balance at September 1, 2013	$	1,424,115
Issuance of derivative liabilities		34,500
Derecognition of derivative liabilities related to conversion of convertible debt		(186,946	)
Gain on derivative liabilities		(83,333	)
Balance at November 30, 2013	$	1,188,336